Neobanks are disrupting the banking industry. They operate exclusively online and do not have any physical branches. They use latest communication, data and other technologies to connect with their customers and offer banking services. This setup means they do not have to invest in brick and mortar branches that require lots of physical infrastructure. These banks also do not have as many banking professionals as other banks. Neobanks can operate 24/7 and serve their customers all over the country and even across the world. They are disrupting the traditional banking setup that has dominated the world for several centuries.
Technology-First Banks
This is how these banks are able to serve their customers without having physical branches. Their customers use ATM when they need cash. Most other banking services are provided through the online channel. In fact, loan applicants can borrow loans through the online medium itself. They do not have to visit the bank. All documents required for borrowing a loan can be submitted online in digital form. The bank itself can check many of these documents through the online systems.
How Are Neobanks Disrupting the Traditional Banking System?
People have always used physical branches of banks to do most of their banking transactions. Even when these banks have started using different types of digital technologies to serve their customers, they still maintain physical branches for most purposes. Neobanks are trying to disrupt this process by using latest technologies. Their customers can avail banking facilities from anywhere as long as they have internet access.
This level of flexibility is not offered by traditional banks to their customers. This is how neobanks are able to carve a niche for themselves in the banking industry. They are far away from removing traditional banks but they have started getting traction in many sectors of the banking industry. They are offering customized solutions to overcome the drawback of not having physical branches.
Why Bank Customers Are Receptive to This Idea?
Most people have got used to ordering their products and services through the online channel. They are now used to the convenience and flexibility this setup offers. Now they expect same benefits from other product and service providers. That applies to the banking services as well. Bank customers now want to do banking from their home or office, or on the go. Neobanks understand these demands and are better than traditional banks in using latest technologies to serve their customers.
Neobanks are nimble and can move fast with the changed banking and borrowing scenarios. That is not the case with the traditional banks that are unable to implement new features or customize their solutions quickly.
The article has been published by the editorial board of the Fintek Diary. Happy Reading. For more information please visit www.fintekdiary.com
