For the tech-savvy banking consumer, digital banking is a convenient option. The incidence of COVID has resulted in a massive increase in online banking in many European and Asian countries.
India is no different and has mirrored the same trend.
Speaking of convenience, Neobanks have taken it to a whole new level. While still a niche segment, Neobanking is finding increasing adoption in India, compelled by COVID.
India, with its large unbanked population, offers significant potential for
the banking industry to achieve disruptive growth.
On the business side, SMEs and Startups are obvious current and potential
consumers. The rapidly evolving new segment, which comprises gig economy professionals, millennials and even teenagers, represents a significant opportunity that is yet to be tapped.
For these reasons, Neobanks in India have attracted significant interest from funding bodies. North of $100 million has been issued in funding to this segment in 2019, despite the general economic slowdown around the globe.
So what is piquing the interest of Indian consumers and driving the demand for neobanking? The buoyant potential for consumer adoption of neobanks is due to the significant benefits they offer:
Neobanking platforms combine the best user experience enabled by digital technology with the comprehensiveness, security and trust associated with conventional banking and financial services.
All traditional banking services such as deposits, loans, insurance, taxations, compliance and account statements, amongst others, are available to consumers in one place.
Additionally, financial technology ensures that the digital user experience is smooth, seamless, transparent and real-time.
The addition of several layers of authentication further reduces the possibility of banking fraud.
Ease of Access
Neobanking platforms make services available digitally on-the-go through PC and mobile devices. They are tied to traditional banks but without the disadvantages of time- consuming waiting processes and paperwork.
Furthermore, financial technology allows effortless delivery of one-touch, on-demand customer service enabled by a host of artificial intelligence tools.
Neobanking does not stop with banking services.
A plethora of features that make life easier is being offered to the average digitally savvy customer.
Amongst them are day-to-day bookkeeping, digital dashboards for multiple banks, generation of eWay bills, integrated payment gateway, multi-user configuration, multi- branch support, forecasting and business reporting.
With their eyes on the pie, neobanks are seeking to attract consumers with their low prices, non-fee-based monetization models with incentivization for use. By encouraging consumers to adopt neobanks, the segment is contributing tremendously to financial inclusion in India.
A Word of Caution, Though
The interest for adopting Neobanking platforms is expected to extend even beyond the disruptive effect that COVID has brought on.
The Big Wave, Indeed!
The hope is Regulatory bodies taking a favourable stance in issuing virtual licenses to Neobanks in the coming years will allow them to operate their own core banking.
This is expected to enable neobanks to provide even better services to consumers and create an ecosystem of partnerships between them and traditional banks, which will redefine India’s banking and financial services space.
The BankNXT is a next-generation business banking platform for SMEs and startups. To know more, visit www.thebanknxt.com