Neo is the New Bank

by | Aug 16, 2022 | Uncategorized

The world is becoming more tech-savvy, and it is becoming difficult to imagine a world without technologies such as artificial intelligence and machine learning. It is steadily passing into everyday business use. From trend predictions to everyday workflow management, AI can be used in different fields. Companies are deploying AI in fields, such as voice-to-text features, online customer support, and are even generating business reports without the supervision of the experts. Machine learning is a subset of AI that allows computers and applications to become more accurate and predict favourable outcomes. It helps bring out the power of AI in unique ways.

The application of machine learning is across different industries and verticals. Businesses can leverage and learn this skill to make more informed decisions. Here we have listed some critical reasons why machine learning is going to be one of the most required skill sets for 2021-22

India’s traditional banking system is cluttered with problems that are quite frankly, behind their time. To name a few – legacy infrastructure, rigid bureaucracy, incomplete financial solutions, inefficient processes, and the worst for last, the abysmal customer service. Neo banks, also called Challenger Banks, are here to bridge that gap, taking over the banking and finance space on a global scale. 


What is a neo bank?


Neo-banks are digital-only banks that do not have any physical presence whatsoever. All their financial services are accessible through an app, on a smartphone. However, neo banks are neither online wallets nor are they the internet or mobile banking offered by physical banks. Neo banks are virtual banks in a true sense, and the crux lies in their customer service. These modern banks partner with traditional banks and NBFCs to gain faster access to capital. Let’s make it easier – think of a neo bank as the financial advisor who eases the cumbersome processes of the existing banking system. They conquer unresolved problems like minimum paperwork, affordability, minimum transaction charges, and more. They exist to provide a rich, integrated, digital experience, with mobile-first banking solutions.


Neo banks have surely gained a credible buzz amongst Fintech entities, new age startups, and customers looking out for a unified money-related portal. Amongst others, frequent global travellers, students, tech-savvy millennials, and even the financially illiterate, make for the increasing customer base of neo banks.


A traditional banker may raise skepticism that the Reserve Bank of India (RBI) has not recognized neo banks. It is true that a separate licensing has not yet been institutionalised for neo banks yet, but nowhere has the banking regulator stated that such entities are not permitted. Customer data and privacy is paramount for neo banks, making the system completely secure especially since it is the partner bank / NBFC that issues the loan.


Why choose a neo bank over a traditional bank?


A neo bank account comes with an app, as most good things come, and a card. Neo banks have made visiting the bank branch a thing of the past. The app comes equipped with advanced features that provide a great user experience. If you’re someone who does not have the time to make branch visits, who largely carries out web-based banking, or operates through multiple different platforms to meet their banking needs, a neo bank is the right fit for you.


To sum it up, neo banks offer:


  • A single integrated platform to meet all sorts of banking needs – saving, investing, borrowing, or spending
  • Swift and easy account creation and maintenance, guaranteeing a positive experience
  • Fast and flexible payouts, accelerating fluidity, enabling operations
  • Real-time tracking with balance update, expense overview, etc. 
  • Smart reporting that tracks all your money movement, largely supporting finance management
  • Mostly mobile-based, built upon innovative, user friendly technology that is highly responsive to its customers
  • A single platform that can analyse comprehensive data and give you personalised service. This is a key value-addition that neo banks offer – access to granular data-driven information presented in easy-to-read dashboard formats. 


Budget 2022 takes a similar view and further endorses the need for digitisation of payments. In order to accelerate innovation in the fintech space, the budget has been supportive of more partnerships between banks and fintech as this will aid in pushing the economy towards financial inclusion. Consequently, the banking regulatory space in India is at a fast-paced evolution stage and encouraging towards the growth of Fintech & Digitisation.


In this light, neo banks are likely to be offered niche licences in the future. Neo banks are the road forward towards profitable growth and some semblance of financial freedom.


About the author:

Neeraj Singh 

Neeraj is the co-founder and COO of Nupay. He possesses over 17+ years of relevant and global experience across areas in business and finance and currently leads the operations at Nupay to success at every step.

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