Neobanks can make a Big-Bang in Banking Industry

🏦 💲 Neobanks can make a Big-Bang in Banking Industry 🏦 💲

One of the most popular fintech services disrupting traditional banking is neobanking. A neobank is a new form of bank that operates solely online and is designed with mobile in mind. Instead of going to a real branch or filling out tedious paperwork on paper, customers can open an account using an app on their smartphone.

Such applications are more user-friendly, and most of them include a wide range of banking options, such as savings accounts, auto or home loans, as well as easy payments and transfers. Neobank apps, such as Monzo or Starling Bank in the United Kingdom, and Number26 in Germany, have been fast increasing in Europe and are frequently ranked higher than banks. To stay competitive, banks have invested 1 trillion (USD) on digital banking around the world, according to a Forbes research. Embedded finance, or the capacity to connect a financial service with a typically non-financial business, product, or technology, is changing the future of banking and might be a lucrative development for Neobanks if they position themselves correctly. Neobanks are well-positioned to play a crucial role in the background, offering banking infrastructure to third-party platforms such as online marketplaces, games and allowing consumers to acquire credit at the point of purchase. Neobanks can use this strategy to reach out to a new customer base and process millions of transactions while lowering customer acquisition costs and keeping their retail infrastructure.