Neobanks are a new phenomenon in the modern age and are creating huge momentum in the modern banking world.
Wondering what a neobank is? A neobank is a digital bank that provides services exclusively via a mobile app or online. There are many factors that set them apart from each other.
Want to know more about this new type of banking? Let us have more discussion over neobanks in this blog. Read ahead.
Concept of Neobanks Explained:
Primarily, neobanks do not come with any physical branches. They are completely mobile-based. They are a very convenient option for users who want to pursue banking without any hassle.
Second, neobanks tend to charge you less as compared to traditional banks. The underlying reason is that these banks do not have to incur the overhead costs which are usually linked with running physical banks.
Finally, neobanks have greater cutting-edge features than traditional banks. For instance, many neobanks provide the customer with the facility to save money on the basis of their spending habits.
A Market Overview:
The neobanking market is mushrooming rapidly in the United States, Europe, and Asia. In 2020, over 60 million Americans chose to go with neobanks and this number is anticipated to increase to over 80 million by 2025. Factors like the increased popularity of mobile banking, and the rise of digital nomads and freelancers are contributing to the expansion of neobanks.
If we consider the period 2023 to 2030, then this market is forecasted to grow at a CAGR of 53 per cent in Europe. However, in Asia, this market is small but is growing rapidly.
Key Benefits of Neobanking:
Convenience:
The convenience of neobanks is matchless and makes it enticing for the customers. They can do their banking-related tasks anywhere, anytime or from any device. They do not come with brick-and-mortar branches, which makes it possible to offer their services at a fraction of the cost of traditional banks.
Agility:
These banks come with much more agility as they do not have the legacy systems and processes of traditional banks. They are much faster in executing new technologies and offering new services. This feature makes them different from others.
Boundlessness:
Another advantage is that neobanks have their openness to the international market because they are not liable to the same regulations as traditional banks. This comes as a big opportunity for neobanks to get into the global market.
Quality:
Neobanks offer much more customer-focused service than traditional banks. They are based on the needs of their customers and assure upgraded customer experience without any doubt. Customer satisfaction is the main reason why neobanks are growing in popularity.
Affordability:
Having lower overheads makes it possible for the neobanks to offer services at quite reasonable rates. These are the perfect options for people who are looking for an affordable and flexible way to do banking.
Top Features to Build an Impactful Mobile Neobank App:
Authentication:
If we talk about security, then one of the most amazing features is biometric identification. The purpose of this app is to ensure that only authorized users can have access to the app and its data. The most common biometric identification features are fingertips and iris scanning.
Then, there comes two-factor authentication. This clearly means, that apart from a password, users have to enter a code that is sent to their mobile phone to log in. Lastly, there is the use of encryption to safeguard user data.
Single-Screen Transfers:
Traditional money transfers have become an indispensable part of our regular life. These features are made with no clicks or a few clicks. This no-click-to-few-click journey is great for the users and improves the user experience. Users have multiple payment options from a single screen.
Multiple Payment Options:
Considering the payment options, person-to-person transfers are gaining huge popularity nowadays. There are various ways to execute this thing. API integration with third-party services is one of the options. Channels such as A2A, P2P, ACH, and services like PayPal are in great demand and make it easy to do transactions.
Personalized UX:
Personalized UX is an amazing feature. Through this feature, users feel like having some kind of interaction with their app to personalize their banking experience. For example, digital personal notes are making it easier for users to connect to an app.
Account Opening: Not a Hassle Anymore!
Do you know that gamification is also a part of account opening? It has become quite easy to open an account, unlike the long-stretched process of traditional banks. It is an enticing factor for users.
Biometric Technology:
Neobanks are synonymous with high-end technology. Younger age groups have a fondness for no-password authentication, which is enabled by eyeprint or ear-scanning technology. This leads to an overall positive experience for the users.
The Final Words:
Thinking of starting a neobank? Now is the time to invest in neobanking. It has much potential to be bigger in the future. Get in touch with the experts of Elephy Tech to know more about this new phenomenon.
