The global neobanking market size is exploding. In 2021, it had a value of 47.39 billion USD. For the years 2022 to 2030, experts suggest it will grow at a CAGR of 53.4%.
One reason for the tremendous growth could be the COVID-19 pandemic and a growing virtual presence. Another could be the astounding adaptation of the smartphone.
Neobanks are making gigantic waves in the Fintech industry. Still, because it is a newer concept, many people ask the question, “What is a neobank?”
If you have been wondering about neobanks and what makes them so special, there is no need to anymore. We’ve got the scoop right here, and we are about to unveil all the virtual details.
Let’s get to it.
What is a Neobank?
It is an entirely online bank with no physical location or branches.
Financial providers like these are trying to target tech-savvy customers. Essentially, they are Fintech firms that provide digital and mobile financial services for items like debit cards, payments, lending, money transfers, etc.
Neobanks for a New-Age
The banking industry could use a makeover. The traditional services that brick-and-mortar banking offers are okay for some clients, but customer expectations are quickly evolving. A virtual bank can offer experiences that are more personalized, offering value-added services by leveraging data-driven insights.
Further, neobanks can reduce customer fees significantly because they aren’t subject to the expenses necessary to run a physical bank location.
Pros of a Neobank
As a strictly online bank, they can enhance user experience and offer hassle-free account creation. In fact, a user can create an account from the comfort of home and even from a mobile device. Opening an account in this fashion can be accomplished in only a few minutes.
Neobanks pride themselves on having new products in the works, being developed, and created at a rapid pace. They offer their customers superior user experience and usability.
Because a neobank is made for mobile, you can bank anywhere and anytime. Your virtual bank will work for you while you are on the go, conveniently and at high speed.
Cons of a Neobank
The one drawback that worries even new-age customers is how safe is a neobank. Is it prone to fraud? If you worry about potential mobile identity fraud in today’s digital financial services, this link can offer more info.
Another disadvantage can be that there is no possibility of getting help from a direct contact person because the bank is entirely digital. There is no branch to visit, and clients must be okay with 100% virtual.
The Banking Industry is Evolving
Now that you know what is a neobank, you can see why virtual banking is the evolution of financial services. It just makes sense that while digital technology is skyrocketing, people want their banking to work for them, on the go, easily and quickly.
While physical banking is not going away soon, you might use a neobank for more convenience. For more tips and tricks on technology that is exploding, don’t hop off this site just yet. We have a ton more fantastic articles like this one, so click around for a bit and absorb the wonders of technology.