Are Neobanks changing the face of banking?

As the world goes digital, the banking sector is seeing a massive change with neobanks in the picture now. But what are neobanks? They are exclusively digital banks which operate online and eliminate the needs of a building and it's branches.

The market size of neobanking globally stood at $47.39 billion in 2021. It is estimated to grow at a compounded annual growth rate of 53.4 per cent from 2022 to 2030

Neobanks provide more and better services as compared to the traditional banks who failed miserably to retain their customers, especially during the pandemic.  The demand for digital services grew exponentially during this period and neobanks became the next big thing.

Neobanks use technologies like Artificial Intelligence (AI), cloud computing and automation to improve their services and functionalities.  They also provide personalised services therefore catering to the user's demands uniquely. 

Neobanks enjoy low operational costs as the cost of brick and mortar structures and maintaining them is eliminated. And they are able to offer their customers low or no fees and high-interest rates on deposits. 

Other benefits include low rate, seamless international transactions, fast loan processing, customer benefits and robust security measures like biometric verification, 2-factor authorisation, and encryption. 

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