Functions of Neo Banking
Technology, most notably Artificial Intelligence Technology, is what powers Neo banks’ operations in India. Neo banks don’t have any physical locations, thus their whole service model is based on utilising technology to offer their clients high-quality, highly customised financial services. The Reserve Bank of India (RBI) has not yet given neo banks in India permission to hold a banking licence. Since their banking partners have a banking licence, they are, legally speaking, platforms that provide financial services. Focusing on innovation is one of the essential components of Neo banks. Neo banks are always seeking to advance and improve their use of technology to give clients a smooth experience. They have the extra benefit of having low operating costs because they do not have a physical office from which to offer their services.
Neo Banks in India and its service
Neo banking in India has made huge profits over the past several years thanks to the fintech ecosystem’s focus on user friendliness and client happiness. And if experts are to be believed, Neobanks in India have a promising future. Here is a list of Indian neobanks:
Freo, Fi Money, Jupiter, Freo, Instantpay, Fampay, Mahila Money, Niyo, Razorpay, Chqbook, ZikZuk, Finin.
Neo bank services might utilise any one of the following three business models:
- Traditional banks that are starting their own digital operations.
- Companies in the fintech sector that work with conventional banks to offer a mobile or online interface for their partners’ goods but lack a licence.
- Neo banks are authorised financial organisations that conduct business independently of regular banks. In nations where it is legal, this is often true of licences for digital banking.
Freestanding licenced neo banks in India have not yet received approval.
FIA Global, a top supplier of business correspondent services, states that the typical neo bank services include:
- Accounts for savings and payments,
- as well as services for transferring money &
- Tools for financial education that assist with budgeting.
Most neobanks give little to no credit in order to reduce their risk, which aids in keeping prices low. On the other hand, some neobanks collaborate with ally banks and credit unions to offer loans to people and enterprises.
Neo banking vs Traditional Banking
Traditional banking is a specific bank’s customer service grounded in the actual world in any way—financial, political, or otherwise. Naturally, you are not need to visit the bank location to complete this. A comprehensive range of bank services are available remotely thanks to modern technology. Even very complex operations can be completed remotely from the bank using a desktop or mobile device. Frequently, it doesn’t even matter if you are at home or overseas. In conclusion, everything takes place within the framework of a real bank, albeit outside of its walls.
Neo Banking is only available online. It has no physical locations and communicates with customers only through remote means including phone, chat, and email. All of Neobank’s goods are compiled in a useful mobile app. From the comfort of their home or any other location, consumers have access to their money around-the-clock. Typically, these banks don’t offer the complete spectrum of financial services. They often develop a few specialised items. Their services are also considerably more useful and superior to comparable ones provided by conventional banks.