In this age of technology, no one has the time or patience to go to a bank branch for their banking or business needs. Technological disruptions in the financial sector have created financial solutions like FinTech, RegTech and InsurTech that make financial processes easier for individuals and businesses. Neo banking are the latest technological disruption in the banking sector. They are digital banks that operate exclusively online without any physical branches. Some of these banks cater only to small and medium businesses, due to which they are being called SME neobank.
Despite the economic slowdown after the Covid-19 pandemic, the number of neobanks globally has increased in 2022 as compared to 2020.
Why Neobanks Are the Future
The major reason for the rise of neobanks is the vast scope of the customer base that the traditional banks have underserved. Most of these customers are freelancers, gig workers and small businesses.
Apart from this, there are several other reasons why neobanks have become a buzzword and are being adopted by both individuals and businesses. Some of them are:
Convenience
Neobanks provide first-class convenience to users because they are exclusively online. Thanks to this digital-only infrastructure, customers can also conveniently use all banking services via their smartphones.
Also, banking issues are solved way faster in neobanks, and the representatives can be contacted through social messaging apps.
Low Costs
This is one of the primary reasons why more and more customers choose neobanks over traditional banks.
Traditional banks charge hefty fees from consumers to cover their labour and operational costs for running brick and mortar branches. Neobanks do not have these costs, comply with fewer regulations, and have no credit risks, making them more cost-effective.
Quicker Processing
When a user applies for a personal loan from a traditional bank, they must fill out several documents and undergo plenty of time-consuming procedures.
Most neobanks now enable users to pre-qualify for loans and submit their credit details and score within a matter of minutes.
Smart Reports
Neobanking platforms provide an updated account balance every time the user checks it. It also offers easy access to recent transaction data on a single platform.
Moreover, they give complete reports on all the expenditures made, which can be customized based on their requirements.
Advanced Security
Neobanks offer some of the most advanced features to safeguard user accounts. They implement measures like 2-factor authorization, biometric verification, data encryption, RBAC (role-based access control), and many such security technologies to make the banking experience safer for the users.
While neobanking is in its nascent stage, it is all set to define the future of banking in the coming years. With no additional baggage of legacy and the endless financial technologies available, neobanks can change how banking is conducted and enhance customer experience.
ZikZuk is a leading SME neobank in India, on a mission to make it easier for small and medium enterprises to fulfill their business credit needs.
Apart from the neo banking services, ZikZuk also provides the Business Finance Manager platform, which integrates with the business’ Tally account to give a complete view of its finances, automate payment reminders, forecast cash flow, and enable users to access Tally data on mobile.
Interested? Reach out to us today to know more!
Source – https://thefinancialbrand.com/list-of-digital-banks/