As we entered the 21st century, we have witnessed the remarkable wonders of technology and beneficial advancements. Yet these advancements have created so many opportunities for development, success and security. To keep pace with the fast running life we are living in, it is getting necessary that we have timeless products and services. Neobanks are one of these services and products in the field of banking and fintech (financial technology) that are opening ways to a faster and better life.
Ideas and approaches, when proposed, are either accepted or rejected. Neobank is one of those ideas which is marking success and heading towards the future with all its practical influence in banking. It will not be wrong to say that it is the most advanced version of e-banking. When cash became heavier to carry, the market launched debit and credit cards.
Now, as keeping the plastic cards or cryptocurrency is becoming a burden. People are demanding something more improved such as virtual cards. And with the invention of neobanks, it seems like everything is shrinking to settle in the phone.
Serving the underserved
Neobanks being without a physically existing bank, is offering access to people who cannot afford to have a bank account. And even if they can, they are not well-served due to the strict policies of incumbent banks. For example, it caters to provide services to small businesses, freelancers, entrepreneurs, immigrants and unbanked as well. That are usually neglected by the traditional banks. Because incumbents run through significant funds that will not be supported by small businesses and independent hard earners.
So this revolution in banking and financing is pleasing several people who used to avoid having an account before just for all the undesirable formalities and robust policies. This scenario is now making the position of virtual banks strong in the market and being a fierce competitor to the traditional. And it is hoping to have a successful future with all the people’s support.
People nowadays prefer things online, whether it is food, shopping, enjoyment or banking. This is another reason which is making neobanks stand prominent in the future. Because everyone wants to have ease of accessibility over almost everything. Since neobanks are operated on mobile apps entirely, there are no limitations of time to get served. Anyone can easily open a personal bank account from anywhere, anytime.
Challenging traditional banks
Becoming popular in just a few years, neobanks seems to become a great challenger to traditional banks. They are more secure, provide customer friendly services, and more accessible. Having a virtual account, you would not have to carry your cards because temporary virtual cards are replacing plastic cards. That means you pay, purchase, transfer or withdraw money from your phone with a debit or credit card number provided for a short period of time and just for a single-use. You receive a virtual credit or debit card number on your smartphone, you make a transaction, and it expires.
This process has minimized the chances of theft and fraud with a high proportion compared to the usual ways. If your plastic cards get stolen, you will have to go through a whole long process to prevent the misuse. First you will have to get it blocked, if it’s lost or stolen, then you would have to get a new one for which you need to wait some days. And the delay becomes unpleasant when there is official work ahead.
It was all about the safety of funds from frauds. In the matter of privacy and security, neobanks are also ahead in this. A standard debit card number can lead to all the personal information of the consumer if hacked. While the virtual card number being temporary saves the users from getting personal details such as name, account number or total amount in the bank leaked.