Gone are the days, when people used to stand in long queues for banking transactions. With the advent of internet banking, many banking operations became possible through mobile. Now, digital banking has leapt forward and some Banks are offering all-digital operations. In which everything can be done through mobile or laptop. This is called Neo banking. The Neo Bank model is growing rapidly in the world. It has already started in India as well. It is expected to become an alternative to traditional banks in the near future. Today, in this article we will talk about these types of banks and their benefits.
What is a Neo Bank?
In simple words, neo bank is a combination of traditional banking and fintech. The functioning of Neo Bank is 100% digital. These banks do not have any physical branches. This means that Neo Bank does not have any branches like traditional banks. Everything is done through the app. Neo Bank offers all the banking facilities that you would find in a commercial bank. You will get full Banking service while sitting at home.
The working of Neo Bank is completely technology-based. That’s why they use cloud tech platforms. Neo banks are giving tough competition to traditional banks in many countries of the world. Its services are more popular among the new generation customers.
Benefits of Account in a Neo Bank
- Neo Bank focuses on specific types of customers. These include people who prefer digital banking, SMEs and people with low salaries.
- Since Neo Bank does not have any branches, its services are cheaper than traditional banks.
- It takes a few minutes to open an account, verification or for any other Banking operation.
- These banks allow users to open an instant account. Those offering loans give instant credit by using innovative strategies for evaluating your creditworthiness.
Neo Banks in India
In we talk about India, these Fintech firms can’t get a banking licence so they rely on bank partners to offer licensed services. The reason is that the Reserve Bank of India does not allow banks to be 100% digital yet.
However, there are about a dozen Neo Banks in India. These include RazorPayX, Open, Niyo, Jupiter, EpiFi. ICICI Bank is at the forefront in this matter. Experts say that in the near future, RBI may give license to Neo Banks to work independently.