NEO BANKS

INTRODUCTION TO BANKING
INTRODUCTION
“Fintech is the future of finance, and neo banking is the future of
fintech.”

• Neo banks are digital-only banking platforms that operate solely

online. Simply put, they do not have a physical presence. For
customers, transactions in traditional banks could require a lot of
time and effort. Neo banks promise a seamless online experience
by bringing an experiential, digital layer on top of traditional
banking. Due to their tech-driven nature, customers can create
accounts by themselves and use their offerings hassle-free.
 HOW DOES NEO BANK WORK?

Neo” means new. These are new-age banks without any physical location,
present entirely online. They provide digital, mobile-first financial solutions for
payments, money transfers, lending, and more. They allow customers to make
deposits and withdraw money. They offer debit cards, investment facilities, and
more. They even provide credit and lending services. However, most neo banks
do not have a banking license and cannot operate stand-alone — most neo
banks partner with licensed banks to provide financial services.
FEATURES
Today, smartphone usage and internet penetration are growing faster in India than in
many other countries. Neo banks have taken advantage of this situation and provide
services that are fired up by technology. Here are features of neo banks that differentiate
them from traditional banks:
• Savings account: High-waiting times spent in traditional brick-and-mortar banks may
seem endless to users. Due to the online nature of neo banks, they can easily enable
customers to open savings accounts – furnished with even a physical debit card.
• Credit cards: Neo banks promise great offers on credit cards. With traditional banks
being wary of offering financial services to certain industries and sectors (like startups),
neo banks are fast becoming a more viable option.
• Personal or business loans: Neo banks offer an umbrella of services including
individual and startup loans, and also aim to serve some of the underbanked
communities. In doing so, neo banks are addressing and bridging the gap between
traditional banks, individuals, and growing businesses across the country.
BENEFITS
• Lower operating cost: No physical branches, minimal regulation, and credit risk
keep the cost of running a new bank low, resulting in higher revenues. Unlike
traditional banks, there are no monthly maintenance fees.
• Speedy service: Neo banks function 24/7. One can effortlessly carry out day-to-
day tasks like making payments, anytime, anywhere. Their customer services are
customized and the use of AI helps to solve customer concerns in real-time.
• Easy account creation: Unlike traditional banks, customers can create an
account on a neo bank in a few simple steps.
• Highly secure: Neo banks don’t rely on outdated, legacy technology, and hence
tend to have stringent measures for privacy, security, and safety of their
platforms.
DOWNSIDES
• Impersonal assistance: The lack of face-to-face support for complex financial
transactions or processes may be frustrating for most users.
• Limited services: Neo banks do not offer all the benefits of a traditional bank
since they lack a banking license.
• Lack of trust and reliability: Neo banking lacks the years of operational
experience that traditional banks have. To build familiarity and confidence,
customers may need to experience their services for some time, probably free of
cost before deciding to sign up for premium services.
• Security: Neo banks operate 100% digitally. This makes them susceptible to
security breaches, cyberattacks, and similar online threats.
NEO BANKS V/S TRADITIONAL BANKS
• The customer base of neo banks is less compared to that of the traditional
banks. Neo banks have a long way to go before they take over the scale of
business of conventional banks.
• Traditional banks have deep pockets and significant funds compared to neo
banks, which neo banks lack since most of them are still in the nascent stage in
India.
• Neo banks are completely digital, existing mostly independently of traditional
banks. They have no physical branch locations, unlike traditional banks.
• Neobanks only offer a select range of services as compared to traditional
banks, but these services are often highly personalised using state-of-the-art
technologies, like AI.
INCORPORATING CRYPTO
FRIENDLY SOLUTIONS
• Neo-banking and cryptocurrency banking as a service are
concepts that will "stay in the game" over the coming years and
become the new norm in the fintech sector. Customers are
becoming more aware of and knowledgeable about the huge
potential of crypto-friendly bank development. As a result, major
market players have already been investing in this evolving space
and skillfully meeting the needs of modern customers. As an asset
and a currency, cryptocurrencies are likely to have a big impact on
wealth management, monetary and fiscal policy, and international
trade in the coming years.
SOME OF THE BEST NEO BANKS
1. FI MONEY 3. JUPITER

2. RAZOR PAY X 4. FREO

FUTURE OF NEO BANKING
Neo-banks are at the forefront to revolutionize the financial services space,
globally.
• Between 2016-2020, the neo-banking market has registered a CAGR of 50.6%
• By the end of 2030, the neo-banking market is projected to reach $2.05 trillion.
CAGR of 53.4%
• The regions of Indo-Pacific and Europe are poised to provide excellent
business opportunities for neo-banks if regulatory relaxations are provided by
central bankers
• China is predicted to be the best country for the neo-banking business to thrive
by 2025
THANKYOU
PRESENTED BY :
KHUSHI KASHYAP
BBA BFSI SECTION-B (1ST SEM)