How neobanks are different from the traditional banking systems .

What are Neo-banks, exactly?

Neo-banks are financial technology (fintech) enterprises that only operate online or through mobile apps. Neo-banks are digital banks that do not have physical branches.

What sets them apart from typical banks?

Neo-banks are upending the old banking system by using technology and artificial intelligence (AI) to provide consumers with a variety of personalized services. Traditional banks, on the other hand, use an omni-channel approach to offer a wide range of products and services, which includes having both physical (via branches and ATMs) and digital banking presence.

Neo-banks provide a wide range of services to consumers in the retail and small-to-medium enterprise (SME) categories, ranging from customer acquisition to standard banking services such as remittances, money transfers, utility payments, and personal finance. Neo-banks typically use a design thinking approach to a certain banking area and modify their goods and services to make banking easier and more comfortable for end users.

Top Neobanks in India

Jupiter, FI Money, Niyo, OcareNeo, ZikZuk, Open, Finin, Kotak811, Instapay & RazorpayX

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In India, can Neobanks take the role of traditional banks?

While the future of neobanks in India is bright, the idea of their erasing the traditional banks' appeal and legitimacy is a long way off. There are two primary reasons why neobanks lag behind the regular banking system:

Traditional Indian banks provide a wide range of services and products to consumers from all walks of life. As a result, traditional banks can be found even in the most distant Indian communities without access to the internet. The best neobanks in India, on the other hand, offer a limited number of products and services tailored to a certain consumer group.

The traditional means of banking from brick-and-mortar institutions recognized by the RBI retain the concept of a bank to them. Furthermore, because neo banking is a relatively new idea in India, even the tech-savvy population's willingness to transfer to neobanks appears dismal.

With the growing number of neobanks in India, it is safe to say that neobanks have a bright future in the country. Neobanks must, however, provide policies, goods, and services that cater to a wider audience than only India's youth in order to challenge the traditional banking system.

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