Neobanks: Millenial solution for the common

 A neobank (also known as an online bank, internet-only bank, virtual bank, or digital bank) is a type of direct bank that operates exclusively online without traditional physical branch networks. This is the description you would find on Wikipedia.

To make things simple, a neobank is one that only has an online presence and makes getting usual bank things done a whole lot easier. All the usual banking with the power of one app. The counter-question to this would be that conventional banks have apps too. This is where they take it up by a notch and help the customer with different ways to save their money and then spend it mindfully. Neobanks are also employing AI (Artificial Intelligence) to offer different types of personalized experiences for customers. The USP of neobank is the time it takes to create an account on one. Unlike most traditional banks where the process is a long and arduous one, it takes a few minutes to open your account with your Aadhar and a couple more to get your E-KYC done to increase your transaction limits

So, why a neobank you may ask; The answer to this is traditional banks cover all the basics and make sure there’s no disruption in services, but nothing more. Neobanks offer the basics and the added advantages which help manage one’s money in a better way. They also have benefits like lower international transaction charges (free in some cases) and a zero-balance account by default. They also provide rewards for every spend (even for UPI transactions) and partner with various brands to provide extra offers. Customers also get a digital debit card instantly and a free physical card on-demand. Since everything is done on an app, things like transaction limits for the card, bank statement, and fund transfers can all be accessed within a few seconds. 

This might get you thinking about how secure a neobank is and how safe your money is in their hands. For starters, neobanks are partnering with traditional banks (RBI Licensed) to fulfill the transaction side of things. They are also employing industry-leading security protocols for their apps. Logging into a neobank account is done using the most secure way possible, using one’s fingerprint or Face ID( ahem, iPhones). There might be thought on how extra rewards and discounts are being dished out to the customers. This is due to the basic fact that they don't have to incur the cost associated with running brick and mortar branches.

I would not recommend using a neobank account as one’s primary bank account, at least for now. But, it is a really good alternative to traditional banks for all the digital transactions we do these days with bonuses like rewards, better discounts, and less hassle in getting back money from failed transactions as an in-app help feature makes contacting customer care quicker and accelerates the refund process. 

I have personally used a few of them and am sure that they are here to stay for a long time and disrupt the banking and finance space in India. I am sharing the website links for the neobanks I have used below.

Fi Money  Invite Code: 4HFF5CYVP2

Jupiter Money

P.C: Digipay.guru