Neo banking Future in India:
The banking industry’s future lies with Neo Bank. In order to deliver hassle-free transactions, Neo Bank is introducing a lot of new user data with an intuitive interface. The Neo Bank will also assist in raising money and putting it in the right accounts so that the government can effectively monitor it. Neo Bank focuses on MSMEs because they are concerned with national development at the lowest possible cost. Because most neo banks also let customers to file their GST returns and other indirect taxes, they can be a good banking alternative for quick payment and collection processes as well as for tax compliance. India is one of the top countries with a significant potential for digital payments, according to the Digital Evolution Index. We can create a society without cash, which is something that is necessary. To transition from a cash economy to one with less cash is the goal. Revolt unveiled intentions to provide Neo banking services in India, at one stage estimated to be worth $33 billion. The Reserve Bank of India issued a circular in 2019 that permits fin-tech companies to enter the Indian banking business in a limited ecosystem using the idea of neo banks.
A way forward
The RBI, SEBI, and IRDAI are largely responsible for regulating the financial sector in India. These regulators have put out a number of initiatives and rules to improve, standardise, streamline, and ensure the safety of access to financial goods through digital channels. The enormous work done in, it is admirable that all regulators strive to update their rules to reflect the constantly evolving technical advancements and innovations in the financial sector. For instance, the Regulatory Sandbox programme that all regulators launched in recent years allows them to test innovative goods and services in real time within a regulatory framework. In the current environment, initiatives like Video KYC, the creation of the Reserve Bank Innovation Hub, and the implementation of the Account Aggregator architecture are equally noteworthy. Future forecasts predict that the already-expanding neobanking sector will expand quickly if the regulators maintain their proactive attitude.
But because the industry is still developing, it is crucial that laws progress steadily with it. The neobanking industry is anticipated to stabilise with new business models and products in a few years, and Indian authorities, like their international counterparts, may consider actively regulating neobanks.
The concept of banking without banks and banks without branches is growing more and more popular as the world becomes more technologically aware and moves closer to full digitization. Neo banks are the best approach to do that as of recent years. Neo banks, which are virtually existent, operate on the internet, collaborate with banks, and offer the majority of financial services at extremely low costs. Customers are able to get banking services right from their location as they become more knowledgeable about computers and technology. People that have enough education, such as those in industrialised countries, are attempting to get used to this new technology. People in the USA, the UK, Australia, and other countries see this new technology as a way to avoid travelling to various areas to do their business. And as a result, neo banking has grown more rapidly in western nations than in Asian ones.