Neo Banks are 100% digital direct banks that can be made available to customers through mobile apps and personal computers. It is a virtual bank without any branch and it only runs online It is completely virtual rather than physical This gives customers the experience of digital banking without actually visiting the bank. The term gained prominence in 2017 to describe. Fintech providers are challenging traditional banks. It originated in the United Kingdom and aims to reduce costs provide a continuous customer experience and expand non-bank banking services. Neo-banking in India bridges the gap between the services provided by traditional banks and the evolving expectations of consumers in the digital age. They are changing the face of Fintech and one-day traditional banks may take a lunar eclipse. Many digital banks may be confused with digital banks. Both are the same because they provide banking services through smartphones and other devices but their equality ends.
Neo-banking in India offers customers a cheaper alternative to traditional banks. Without a physical branch, you can think of a physical bank as a digital bank, providing services that traditional banks do not and effectively do. They leverage technology and artificial intelligence to provide personalized service to customers while reducing operating costs.
In India, these companies do not have their bank licenses but rely on bank partners to provide licensed services. This is because the Reserve Bank of India (RBI) does not allow banks to be 100% digital (although some foreign banks only offer digital products through their local units.) The RBI continues to prioritize the physical presence of banks. He spoke in support of the US Alliance but said that maintaining some independence was important for digital banking.
Traditional banks have many advantages over neo banks, such as funding and - most importantly - customer trust. However, old methods weigh them down and make it difficult for them to adapt to the growing needs of a tech-savvy generation.
Neo-Banking in India has no money or customer base to destroy traditional banks, they have something special in their arsenal - Innovation. They can also launch features and develop partnerships to serve customers faster than traditional banks.
What is neo-banking?
A bank without a branch is a kind of digital bank where online banking is completely online rather than physically presented in a specific place. This is a broad umbrella of financial service providers that attract today’s tech-savvy customers. Neo Bank can be called a fintech firm that offers digital and mobile-first financial solution payments and money transfers, and cash termination payments. Neo banks do not have bank licenses but rely on bank partners to provide banking licensed services. As the financial landscape shifts towards customer experience and satisfaction, a gap has been created in what traditional banks expect. And, Neo Banking is trying to fill that gap
Most traditional banks are gardeners by their successor-based infra So, so when it comes to helping small and medium enterprises with financial services such as payment gateways, invoice software, and multiple cash management scenarios, they are in short supply. The difference with the explosion of mobile technology, the only meaning is that banking services can be integrated with other financial services.
Financial services provided by Neo banking in India and its impact on customers-
There has been a significant decline in the financial industry due to the explosion and financial inclusion of mobile technology. Indian consumers are mainly adopting digital means and are moving away from physical money. Customers have made digital transactions comfortable
The integration of technology and banking has positively impacted consumers by making them more customer-friendly. Neobanks have provided liquidity that traditional banks have not Managing a mobile application is much easier and more convenient which manages their money and helps them make different decisions.
Neo banking in India: Scope and Opportunity
Between 2017 and 2018, the number of mobile banking users in India increased significantly. India has witnessed a huge increase in volume and price for mobile banking consumers. India has a good scope for the growth of Neo banking as micro, small and medium enterprises (MSMEs) in the country can benefit greatly from their services. The MSMEs of all industrial units in the country are 95%, but they are protected by the performance of traditional banks, which deprives them of formal questioning banking and credit requirements.
There are currently four major Neo banks in India that have received substantial funding from investors. In addition, there are banks around the world that see India as an e-engine of growth. In the future, the Pacific region of Asia could witness significant growth in Neo bank. Emerging economies like India are projected to see better health growth in the future based on the infiltration of smartphones in the future, high-tech technology and solutions, and the size of automated, convenient, and cost-effective solutions provided by Neo banking in India.
Regulatory Considerations for Neo banking in India
Virtual banking licenses in India are still nightly. However, there are foreign national banks that provide digital products only through their Indian subsidiaries The Reserve Bank of India [1] has tightened its grip on the physical presence of banks and has made it mandatory for the physical presence of digital banking service providers.
The need for bank branches is to serve customers and resolve their disputes and grievances in person. Currently, the Neo banks are outsourcing their banking responsibilities to licensed individuals, addressing the challenge of creating a strategic partnership with traditional banks and expanding existing services. This model is deployed by most of the major players in Neo banking in India
Neo banks partner with traditional banks and provide business and consumer banking services. This is part of their strategy and a way to remove regulatory barriers Financial and banking services are provided by Neo bank for one customer, but from a regulatory point of view, currency transactions are handled by their partner banks.
Overall Neo banking in India has had a commendable response. The digital payment system is becoming the trend in the present scenario.