The Fintech industry has been growing exponentially in the last few years. One of the new buzzwords that have taken the digital world by storm is ‘neobanking’. It bridges the gap between what customers want and what a traditional bank has to offer. In this age of a fast-changing world, even the banking industry is going through disruptions for the betterment of the economy. Neobanking has completely renewed the banking landscape and increased the scope of fintech services in India. Let’s understand what neobanking is all about and how it benefits businesses.
What Is A Neobank?
A digital bank that has no physical presence or branches is known as a neobank. Its operations are entirely online. Also known as fintech firms, these banks are completely focused on creating value for tech-savvy customers. Neobanks offer a wide range of banking services such as payments, money transfer etc., over mobile applications and digital websites. With the advent of technology, there is a rising gap between customer’s demand and traditional banking services. Neobanks is an effort to bridge the same with the state of the art technology and fintech solutions.
How Does A Neobank Work?
Neobanks are based on the “Banking as a Service” model. Unlike traditional banks, the business model of neobanks is customer-centric. However, it also earns nominally through the difference between lending and deposits. The main focus of a neobank is to offer personalised services to its customers at relatively affordable prices. As it is not present physically, costs such as rent, staff salary are not in the picture. This benefit is directly passed on to the users in terms of lower fees and operating charges.
What Are The Benefits Of Neobanking For Businesses?
Neobanking is not only beneficial for individuals but for online businesses as well in the following ways:
As a business, it can get overwhelming to check on the finances that are spread over multiple digital or traditional mediums. Neobanks simplify banking for businesses by solving a very specific challenge that they’re facing.
Seamless User Experience
To stay relevant in this competitive market, a business must take great care of its online presence. Be it website, loading speed or payment gateway. Using neobanking services for payments offers both you & your customers a seamless and superior experience.
Minimal Manual Effort
Unlike the traditional banking system, you do not have to run to a bank for approving any payments. Hence, there is no manual effort because of complete online operations. Moreover, there is no wait time due to incompetent software or physical banking timings.
Robust Financial CRM
A business also needs to track and analyse money movement to its vendors, employees, bills, customers etc. Neobanking offers a robust financial CRM for analysing financial patterns and finding out what works best and what does not. A business is better equipped to find any leakages or loss points and correct them immediately.
Neobanking is the innovation in the fintech industry. It is providing businesses with a simple and effective banking option. One can say that it is using the best of the internet with robust security for creating a virtually seamless banking infrastructure. Today’s customers are tech-savvy who want the best user experience with personalised banking solutions. In such a scenario, neobanking helps businesses retain existing customers and attract new ones because of a straightforward banking facility.