Hi there! With the attention it generates on the internet (both on social media and elsewhere), it’s safe to assume you’re already aware of the concept of neo banks, if not pre-equipped with a basic knowledge of how they operate. After all, neo banking and the rise of paperless, branchless banks have taken the financial industry by storm, positioning themselves as the centre of attention for customers, investors, analysts and even plain observers. However, there does seem to be a lack of complete understanding of neo banking online, and what it entails, which is absolutely essential if you are to make an informed decision on which type of bank to use, especially for those who wonder how feasible neo banking in India is.
Introduction to Neo Banking
For the few of you who don’t know what neo banking is, picture a bank with almost all of its services, but without any complications, hassles or even a physical location. That’s a neo bank. Neo banks:
- Exist completely online, with no physical branches or storefronts (ultimately reducing the costs for you, the customer)
- Offer real-time (even cross-border) transactions
- Completely transparent with push notifications on every single-use
- Offer the benefits of state of the art technology, artificial intelligence (AI) and Machine learning to help optimise the way you save, manage and use money
- This and more, at the tips of your finger.
It is no secret that in order to avail many of the services offered by traditional banks, you have to face a range of potential complications – like wait-times, queues, documentations and other similar hassles. Especially if you are an SME, you may be painfully aware of how the technology used by banks can often deliver more frustration than benefits. Even small, but essential tasks like statement generation and payment gateways evolve to become convoluted features.
That’s not the case with neo banks.
The idea of neo banking revolves around simplifying as much as possible, making it available for your use with just a few taps. With no physical branches, neo banks benefit not just from lowered costs, but significant simplification in their operations as well. They’re more likely to automate and optimise operations due to the very nature of their business.
Advantages of Neo Banks
Customisation: Your satisfaction and your needs are our number one priority. It is a common popular opinion that banks and big financial institutions offer a wide variety of solutions, but most of them don’t suit your needs or aren’t easy to use. Neobanks provide tailor-made services specifically made to cater to the needs of every single one of our customers
No downtime: Despite their austere approach, neo banks do strive to offer a wide variety of financial services, since, like any other enterprise, the goal remains to address as large a market as possible. The advantage is that all of them are accessible whenever and wherever customers want. With 24*7 customer support and automated services, you can be sure that you meet all your banking needs as and when they arise.
Lowered Costs: It is not often that you get to experience optimal services while also enjoying them inexpensively. With little to no capital spent on maintaining physical locations and manual efforts, neo banks have more room to pass on these benefits to users. Most neo banks offer near-zero annual fees, making neo banking in India the cheapest and the best solution for your banking needs, irrespective of whether you are an individual or a business.
Complete Transparency: No hidden charges, no unexplained fees or charges and immediate grievance redressal. You get notifications on your phone for every single transaction made. With the easy to use and understand mobile interface, you can quite literally keep track of every single penny that you deposit/transact with neo banks.
Neo Banking: The Indian Scenario
With the push towards digital transactions by the Indian Government and the growing popularity of neo banking in India, it’s fairly evident that there is a vast untapped potential to serve the needs of a large market in India. According to the Global Findex Database of 2017, almost 80% of India’s population continues to remain underbanked. While this number has certainly come down with the government’s Jhan Dhan Yojana efforts, it has also paved the way for neo banks like Salt to potentially reach everyone with a smartphone and an active internet connection. While it is true that scepticism was high when Fintech solutions first started to emerge, over time, we’re seeing that not only is neo banking safe, it can be relied upon extensively for users all across the nation. In fact, with the help of features like instant freezing, real-time alerts and transparency for every single transaction that takes place, it is just as much safe (if not safer) than traditional banking options.
But what about the regulatory compliances, you may ask? While it is true that the Reserve Bank of India requires a banking licence for any institution to offer banking services, neo banks have found a solution to comply with the necessity without the need for a physical location. Neo banks often partner with traditional banks to overcome regulatory hurdles.
The Important Question: Is Neo Banking in India Safe?
Yes. 100%. Neo banks have to follow the same regulatory guidelines as your local physical bank. Moreover, any deposits upto INR 1,00,000 is guaranteed by the Deposit Insurance and Credit Guarantee Corporation (DICGC). You can keep always keep track of your money, and can instantly get your grievances addressed with the help of 24*7 customer support offered by all the neo banks. Just to reiterate the point, neo banks are completely safe.