What are NEOBanks?
If you are a startup owner, freelancer, or businessman, you must know about neobanks. Neobanks are digital banks; there is no branch of neobanks, even though they don’t have their banking license. Neobanks operates with the help of another bank, and you can open an account using neobanks.
If you already have a bank account, you can operate that too with the help of neobanks.
Many banking solutions –
Neo banks provide many banking solutions like virtual accounts issue cards partnering with license holding banks. However, RBI doesn’t give any banking license to these Neo banks.
Some Neobanks receive licenses for banking operations from the regulatory authorities, and by gaining a license, they become challenger banks.
Enhance user experience –
Additional features by neobanks enhance the user experience. For example, from operations management, supply chain management, and other management, every task requires specific solutions different from corporate Neobanks provide these solutions.
NeoBanks help businesses in hundred ways. They make simple banking functionality and support all other business aspects such as accounting and taxation. These banks work like bridges the gap between old traditional banking systems, functions, and updated technology by providing more smart solutions.
Neobank also charges less than a traditional bank. There are various types of neobanks like
1. B2C –
We can say these are customer types or consumer types of banks. They work by providing personal finance, mutual fund, linking a bank account. You can work personally with these types of neobanks.
2. B2B –
We can say these are a complete form of neobanks. Creating bills manage accounting is the advantage of B2b neobanks.
Some experts said that the neobanks are the future of the Indian banking system. This is because Neobanks typically find the problem in traditional banking methods and provide solutions with the help of artificial intelligence and other tools.
In starting businessman was the only target of neobanks but as time passes neobanks become famous between youngsters and low salaried class.
Some key benefits of neobanks –
- user-friendly banking services
- Cost-effective compared to a traditional bank.
- Provide FMS service
- Best customer support
- Best security features
- Friendly mobile app interface.
- Offers best digital banking services like savings accounts, prepaid cards, bill payments, and other
Why do we need them?
Everyone wants to be more advanced, and in our Indian banking system, traditional banks use old infrastructure, which is very slow compared to the new one. And in the other hand, Neobanks are using the latest technology like biometrics, digital advisors, UIDAI based, and other similar relatively new capabilities to Fintech.
These banks are mostly customer-centric. They are updated with the technical capabilities, and they solve the gaps in infrastructure used in the traditional banking system in India. Our traditional banks offer similar solutions to all types of businesses, but neobanks have different strategies for different reasons.
Most companies move from traditional banks to neobanks due to the lack of holistic solutions to their problems, additional service charges, older services, and uncompetitive pricing.
As there are many neobanks and every Neobank face challenges in the market and want to do their best it results from better services and pocket friendly.