What is a Neobank?

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Munadil Shafat
Student (MBA), Bangladesh

What is a Neobank?

🔥NEW Neobanks are new generation banks which offer banking services over a completely digital platform, in particular mobile apps. Unlike traditional banks, they don't have a brick-and-mortar setup. Thus, users of such banks (only) interact with the bank's mobile apps (or website) to avail banking services.
Although internet banking isn't a new concept, the concept of neobank is still new (thus the word 'neo').

Neobank Business Model

While Internet banking is typically offered by traditional banks to its customers, Neobanks are founded independently of any traditional bank. They typically partner with traditional banks to offer banking services. Using a neobank, customers can avail traditional banking services (deposit, withdrawal, payment, loan etc.) as well as certain niche services usually at a much lower cost that traditional banks cannot offer.

Neobank Examples

Because of gaining extensive funding in recent years, Neobanks have become a buzzword in fintech industry. There are hundreds of players right now in the industry. N26 (Germany), Chime (US), Revolut (UK), Tinkoff (Russia), Nubank (Brazil), just to name few.

Neobank Success Factors

In a growing cashless society powered by smartphone-savvy generations, neobanks are challenging traditional banks with its unique customer-friendly smart banking experience and data-driven, extremely cost-effective business model. They are also called challenger banks for that reason.
Please add below other useful facts regarding NEOBANKS so we get a good overview.
Sources:
Statrys Team (2020), "What are Neobanks?"
Rao, H. (2021)"What is a Neobank? Everything You Should Know", Razorpay
Crasulla (2019), "Neo Banks: Explaining the New Term in Digital Banking", Medium

  Jaap de Jonge
Editor, Netherlands
 

Properties of Neobanks

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CEO, South Africa
 

New Banks Should Remember the Human!

I am 100% pro these new banks as they fit the prof (...)

  Meheresh
Management Consultant, India
 

Are There Any Bank Classifications?

As Jaap de Jonge explained "…offerings vary and th (...)

  Jaap de Jonge
Editor, Netherlands
 

Classifications of Banks Based on Their Bank Permits and Restrictions

@Meheresh: Interesting question. I am unaware of s (...)

  Ivan Kohlinsky
Management Consultant, United Kingdom
 

Interesting Development - Hopefully Well Regulated and Well Understood by Potential Customers

I hope that these Neobanks either pay directly for (...)

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