Neobank: New Way of Banking and Its Advantages

Money is the core of our world. It was the case in all epochs, but now it’s true more than ever. In the era of liberal democracies, globalization, and progress, money is the real measure of your personal capacities. Even modern politics is deeply interconnected with it.

You can think it’s good or bad, but it’s better to know what to do with it. All services which are working with money are in demand today. The fintech industry is flourishing, and mobile banking can be the niche where you’ll realize your ideas. Think about ways of managing money to create passive income or just facilitate all money-related operations – and you’ll be on the way to understanding developing a neobank.

Developing a neobank from scratch can be an interesting enterprise and bring you a lot of money, but you need to understand the situation on its market, key players, and essential features. Let’s start our fintech journey and explore them!

Redesigning a Way of Banking

Neobanks strive to build a new paradigm of money operations. They provide platforms for virtual cards, track transactions, and enable customers to be in close touch with their money. If you are a client of a traditional bank, you usually have no direct access to your money, despite many modern banks starting to go online. Neobanks change this, and that’s why more and more people, especially younger generations, prefer them. See examples of concepts from Dribbble.

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Many of them, as you’ll see on well-known examples like Nubank or Revolut, use modern security practices, which refutes claims that they are less safe than traditional banks. So, while mobile banking is not a wonder today and is used widely, neobanks are moving further.

Developing a neobank can be very inspiring.

More than just a Mobile Bank

Traditional banks often offer online tools, using modern technologies to stay competitive. Still, their foundation is still quite old-school: they rely on mortar-and-brick branches, which people must visit to obtain a card and consultations. Their branches contain cashboxes, ATMs, and consultants. 

Neobanks discard such a way of banking: they make all these operations online. Still, some of them have ATMs, which are usually placed in supermarkets or similar places, or partnerships with other banks and services to deliver their cards.

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Source: https://www.compareremit.com/money-transfer-tips/the-rise-of-neobanks-and-disruption-of-the-financial-industry/ 

In many perspectives, the neobank principle is the future of money operations. Money moves online, as it saves time and reduces expenses. You can manage your money sitting on your sofa, without queues and hustle.

Money Moving Online

Money is deeply interconnected with information. It is the mean of exchange, and the easier it can be exchanged and saved, the better it serves its function. Neobanks optimize all these processes, and by developing a neobank, you can make a contribution into this process.

How do they do this? Let’s describe the crucial neobanking functions:

  • Accessibility means that the bank can be accessed from every point of the country where the Internet is available. Everyone can simply register here and open their account. Many such banks are international and allow people from different countries to have accounts in various currencies.
  • User experience is what makes neobank attractive for customers: easy navigation and comprehension of all money-related data.
  • Customer support is another important element of neobanks. People often need help during their endeavors. 
  • Online cards can be easily issued via the banking app. Then, a client can obtain a physical card or use a virtual one solely, paying via their phone.
  • Partnerships enable neobanks to perform “physical” operations, such as card delivery and cash withdrawal.
  • Beneficial exchange rates can be a fruitful extension, as neobanks have many opportunities for doing that with ease.
  • Data analytics, especially with the help of AI, can greatly enhance the neobank’s performance and competitiveness.
  • Modern security decisions are crucial for neobanks: they can be called their basis. If money operations are secure, then the neobank’s activity can be called successful.

Popular Examples

Let’s see five examples of popular neobanks from various countries. Consider them when developing a neobank yourself.

e7c302c6 492f 4b9c a5d0 173113c5e0d2Revolut was founded in London in  2015 by two Eastern European entrepreneurs. Now it operates in the UK and more than 10 other countries, including the United States, serving more than 20 million customers. Its banking services include easy international money transfers and cryptocurrency exchange. Also, there are many tools for money management, such as budgeting.

9735b9ef d744 49fe 9206 0219bcce4121 Nubank is a Brazilian neobank established in 2013, and now it’s one of the most popular and successful examples. It provides digital banking services through its mobile app, offering features such as free accounts, personal loans, savings, and investment options. It also focuses on providing accessible financial services to the unbanked and underserved population in Brazil. It has more than 70 million customers, mostly in Brazil but also in other Latin American countries.

9ac1b2bf 0b6b 472f a79c 1676d4cffe8cDiscover is a US-based neobank and one of the earliest examples of this type. It was established in 1985 as a financial services company and started online banking operations in 1995, 10 – 20 years before most other neobanks. Currently, it provides checking and savings accounts, certificates of deposit, and various loans, serving more than 50 million Americans. It focuses on competitive interest rates and cashback options, attracting customers with beneficial offers. It also has very responsive customer support, which also provides qualified financial advice.

3cc4d163 fa98 4ecd ac2b 65002eba4654Monobank is a leading Ukrainian neobank established in 2017. It operates as a fully digital bank connected with the more traditional Universal Bank. It’s grown very rapidly, from several thousand clients in 2017 to several million in 2022. The bank focuses on simplicity, transparency, and convenience. It has free account options, instant money transfers, various currencies, budgeting tools, expense tracking, and real-time notifications. A user-friendly interface is one of the central features of Monobank, driving its success. It issues physical cards via its partners.

Conclusion: Some Points to Consider

As you see, neobanks are present in various countries, and if you research a bit, you’ll also find Indian, Chinese, Nigerian, and many other national examples. Still, when developing a neobank yourself, you can consider the idea of entering underdeveloped markets, where there’s plenty of place for growth and a large customer base.

This article’s purpose is to introduce the concept to you, not to provide a full guide. Still, let’s wrap up several points that may help you in developing a neobank:

🏧 Unique features: tax management, investing, currency exchange, multi-currency accounts, free card shipping, and a vast network of partners are just several examples of them.

🏧 User interface and customer support are crucial: you can also add various statistics and financial advice to enhance your success!

🏧 Security and modern technologies, such as blockchain and AI, will ensure that your customers’ money will be secured and they will be able to enrich them.

🏧 Don’t forget about licenses and law compliance, especially if you plan to operate in another country or several countries! Ideally, you must know all the civil and financial laws of these countries and have a lawyer on your team.

Make sure to add your creativity here and generate ideas for money management. They can make your future product unique. Focus on several of them when developing a neobank to deliver the best experience. Read several guides, and start developing an MVP of your future fintech product!

Last Updated on December 15th, 2023