What Is Neobanking And How Does It Work?

Image: Unsplash

25 May 2024

According to Forbes, Neobanks are digital-only banking platforms without a physical presence, offering a seamless online experience


Image: Unsplash

Neobanks operate through partnerships with traditional banks, as fully-digital banking isn't permitted by RBI


Image: Unsplash

They attract millennials and tech-savvy populations by leveraging growing smartphone usage and internet penetration


Image: Unsplash

Neobanks allow easy online savings account creation, often with a physical debit card included


Image: Unsplash

They offer appealing credit card options, especially for startups and underbanked communities


Image: Unsplash

Front-end neobanks partner with traditional banks, while standalone digital banks need a virtual banking licence


Image: Unsplash

Full-stack digital banks, which aren't yet legal in India, require regulatory approvals and operate independently


Image: Unsplash

Neobanks provide personalised services online, differing from digital banks, which are extensions of traditional banks


Image: Unsplash

They have lower operating costs, quicker processes, and stringent security measures but lack personal assistance


Image: Unsplash

Neobanks face regulatory hurdles, and the RBI is cautious about approving fully licensed digital banks


Image: Unsplash

Check More Stories

Image: Reuters 

Image: Unsplash

Image: Unsplash

ndtv.com