What Is Neobanking And How Does It Work?
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25 May 2024
According to Forbes, Neobanks are digital-only banking platforms without a physical presence, offering a seamless online experience
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Neobanks operate through partnerships with traditional banks, as fully-digital banking isn't permitted by RBI
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They attract millennials and tech-savvy populations by leveraging growing smartphone usage and internet penetration
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Neobanks allow easy online savings account creation, often with a physical debit card included
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They offer appealing credit card options, especially for startups and underbanked communities
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Front-end neobanks partner with traditional banks, while standalone digital banks need a virtual banking licence
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Full-stack digital banks, which aren't yet legal in India, require regulatory approvals and operate independently
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Neobanks provide personalised services online, differing from digital banks, which are extensions of traditional banks
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They have lower operating costs, quicker processes, and stringent security measures but lack personal assistance
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Neobanks face regulatory hurdles, and the RBI is cautious about approving fully licensed digital banks
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