NEO Banks In today’s we hear these words at any one time in our life. So, let’s just know about how it differs from traditional banks? Or you should consider a new NEO Banks account or not?
Currently, RBI recognizes a traditional bank, so you can think of all the banks, like SBI, ICICI, HDFC, etc. They are traditional banks, so have rules and regulations. They are very strict about the minimum cash bank reserve (CRR & SLR). They need to maintain, how many branches & ATM should they have, So and so…
RBI is a regulatory body that regulates the Indian banking system, by the analysis of it. How UPI, digital payment – digitalization & technology taking over. Once the UPI comes into the market or in the technology era it changes the definition of transferring money. It’s easy & convenient to operate and transfer.
There was one time when we used to transfer money only through a check or bank transfer. But now millions of rupees are being transferred by one UPI ID or mobile phone number etc.
Now, RBI is saying that if it happens in money transferring. Then there will definitely be a revolution in banking as well. That’s why they began this concept of NEO bank. So, let more understand briefly about NEO Bank Concept –
Define NEO Banks?
NEO Bank is becoming more famous and more common in the world. It is a fintech firm minimizing operating costs and offering a customer-friendly interface. It is 100% digital providing online apps and platforms to support its customers, there are no physical branches. It offers banking services online only via mobile apps or online banking. Customers can open an account seamlessly and control their finances in real-time and also, and they can make online transactions anywhere anytime.
It is also known as an online bank, internet-only bank, virtual bank, etc. It is completely provided online / digital services through mobile applications.
Are NEO Banks being same as digital banks?
No, it is not the same though they are similar in some ways both are different forms of financial institutions.
Digital banks generally had physical branches and provide many banking services but NEO banks are strictly online financial institutions with no physical branches.
Types of NEO Banks: –
- That don’t have a banking license and partner up with Traditional Banks.
- NEO obtain banking licenses and operate fully on their own.
Difference between Traditional Banks and NEO Banks: –
Features of NEO Banks: –
- Safe and secure banking transactions for their customers while they can manage their finances and investments.
- People who travel globally frequently, students, housewives, old people, and even the financial illiterate people can now easily access this Banks through their mobile phones
- They give you the flexibility to travel anywhere anytime in the world without having cash in hand.
- You can purchase anything abroad through an international debit card and also you can withdraw cash abroad.
- You can open an account in just 10-15 minutes without any investment and with minimum paperwork and then you have a virtual debit card for use immediately.
Why NEO Banks?
Banks make life easy by offering customers a free and easy banking experience through mobile apps that get their work done easily and efficiently for them no matter where they are in the world. Accounts are open in just 10-15 minutes with minimum paperwork and a quick KYC form has been filled. It is cost-effective as compared to traditional banks. These banks do not have any physical branches, so the operation and labor costs are zero. Customers don’t have to pay any fees for opening an account with this banks.
Scope in India: –
NEO Banks allows businesses to manage their banking services under one mobile application. Up to the present, there are about 24 types of Banks in India. In 2019 only, more than $90 million was raised by Indian NEO Banks. On one hand, traditional banks themselves are interested in digitalizing and partnership with NEO Banks with new fintech ventures, and on the other hand, RBI has not given licenses to NEO Banks.
With the smartphone users in India set to grow in upcoming years, there is also vast scope for growth for NEO Banks in India.
Some of the top NEO Banks in India are: –