Impact of Neo banking on customer Services
Neo banks have upended the banking sector and had a significant impact on how customers are served. With their astounding presence in India and their quick ascent to new heights, they represent a new cliff for the market for neo banks’ accelerated expansion. Together, our distinguished guests will delve further, learning about the contribution neobanks have made to the banking sector and the potential it offers going forward.
Neobanks fill the gap between the services provided by traditional banks and the changing client expectations in the digital era. They are altering the face of fintech and may eventually supplant conventional banks.
Customers prefer to keep their accounts with Neo Bank over the long term if the transactional fees and services stay the same, according to a recent PGA Labs poll. Customers of Neobank believe that customer service facilities can be improved by 40% and that cashback and rewards can be improved by 55%. By FY26, the Neobanking industry is anticipated to grow at a CAGR of 14%, creating a US$ 16.7B opportunity.
Challenges of Neo Banking
The technical sector has been growing quickly and steadily, and with it have come an increase in the hazards that come with it. According to study done by Accenture in 2019, cybercrime has become a significant issue related with technology in the financial sector and banking industry and has been rising sharply.
2019 Accenture The same analysis indicates that the cost of cybercrime against the financial sector has been rising continuously.
According to the Accenture analysis, there is risk associated with innovation and growth. This aspect must be taken into account when examining the burgeoning Neobanks, which are quickly gaining in popularity.
Neo banking has the same constraints any fledgling endeavour would encounter because it is a new paradigm.
- a) Lack of Personal Interaction: Being entirely online is considered as a disadvantage in overhead and expense reduction.
- b) Cash payments: Even though Indians engage in online shopping and transactions, the preferred method of payment at the payment gateway is cash on delivery in the majority of cases. As a result, neobank must address the needs of making physical cash available and finding alternative sources of income rather than through payment gateways.
- c) Limited financial products: are given by neobanks because they lack a full licence to operate as a bank and are covered by another registered bank. Neo banking currently does not offer several loan and deposit options. According to the expansion, acceptance, and openness of neo banking, they still need to be developed.
- d) Safety and Security: The security of the customer’s money is one of their top worries when making an online or mobile purchase. Neo banking is obviously very secure and is governed by a local regulatory organisation. The degree of assurance and awareness among the client’s needs to be raised.
