Neo banks are digital banks. Neo banks can be simply accessed by devices such as smartphones, computers and so on with internet connection. These neo banks are majorly active in digital apps and websites. Neo banks are alternatives to traditional banks. It provides high interest rate on fixed deposits and low processing fee since it is completely digital and does not require any maintenance charge as traditional banks.
Neo banks mainly target millennials and generation Z because they are almost digital natives and they are more technically advanced. Neo bank provides all their technological needs in banking services. Here are some more details about the working process,technical advancement of neo banking.
WORKING PROCESS OF NEO BANK
Moreover neo banks work similar to that of traditional banks but on a digital platform. Neo banks are initiated by a tie up process with traditional or established banks. Those tied traditional bank handels all the background processes such as depositing and lending the funds. With the background assistance of established banks, neo bank develops digital banking platforms such as mobile apps and websites.
The neo banks deal with the user interface and other customer services such as checking bank balance, debit card, ATM access and loans digitally with the help of artificial intelligence. And the tied partner bank deals with all other background fund activities. Transactions namely withdrawal, transfer, deposit are started via the neo banking platform and processed by the partner traditional banks.
The revenue generated as a result of transactions in the neo banking platform are shared between the partner bank and the neo banking platform.
TRADITIONAL BANK VS NEO BANK
- Traditional banks are built with bricks and mortar and available physically. But neo banks are digital platforms and cannot be physically available.
- Traditional banks can be accessed mostly by the physical branches though it has online accessibility. But neo banks can be accessed by anyone anywhere with an internet connection.
- Traditional banks do not target any audience but neo banks target the people belonging to post millennial or generation z because they are digital natives and expect more advancement in all services.
- Traditional banks provide low interest rates on deposits when compared with neo banks. Since, neo banks are completely digital platforms and do not need much maintenance charge.
- Opening a bank account in a traditional bank is an arduous and time taking process. But opening an account in neo bank is a much simpler process and can be maintained smoothly.
- Neo banks provide more personalized and advanced services to users in comparison with traditional banks.
ADVANTAGES OF NEO BANKS
Neo banks are more appropriate and can be easily accessed with a simple internet connection. Establishing an account is a much simpler process which involves choosing a neo banking platform, documents submission and KYC verification. One can maintain zero balance in neo banks.
Neo banks provide various advanced services and loan offers for new entrepreneurs and freelancers to support them. Neo banks become the alternatives for traditional banks in countries, where the accessibility of physical banks are low and mobile and internet penetration is high.
Neo banks become an engaging option for immigrants. Since neo bank does not require residential status and offers lower service charge for international money transfer.
DISADVANTAGES OF NEO BANKS
Though neo banks have various advantages, it has some drawbacks such as, It lacks some financial services such as, certain loans, insurance and so on. And it shortfalls on personal interactions. Since neo-banks are completely digital, any flaws in internet connection slow down its accessibility.
In this constantly changing world, people need more advancement in the services which interrupts all the day to day activities. Neo banks act as advanced banking solutions for all their banking needs. Clarisco is one of the leading neo banking solution providers. Which builds customized neo banking platforms for their 1000+ clients successfully. If you are interested in building a neo banking platform and need other services on neo banking do contact us without any regrets.
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