You may have read somewhere app names such as Revolut, N26, Monese, bunq. These are all mobile banks or digital bank accounts, in a word: Neobanks.
A Neobank is for all intents and purposes a bank.
Customers, in fact, use Neobanks:
- to safely deposit money;
- request and receive financing;
- pay interest refunds.
The main difference is that a Neobank is 100% digital.
No more bulky buildings, ATMs and branches, but only apps and websites. That’s why they are very practical and can save on maintenance costs and charge lower fees.
The lack of personalized service on-site is compensated for by the use of artificial intelligence, which monitors the user’s behaviour patterns and preferences, analyzes their expenses and provides input for better management of their resources.
This same technology can be applied to fraud identification, ensuring a high level of security.
The Benefits of having a Neobank
Neobanks can draw people closer to finance and to the smart management of their savings by finding effective ways to put them to good use, as:
- They are simple: they make finance understandable to everyone;
- They are transparent: they provide control and clarity on costs and services;
- They’re accessible to everyone: just download them from your Apple Store or Play Store.
- They’re tailored to you: You can customize your account management to suit your needs.
You may be wondering why you should choose a Neobank if you can’t go to a physical location and talk to an accounting professional to manage your finances.
Here is all that only a Neobank can give you:
- Send and receive money at zero cost: have dinner with your friends without ruining the evening’s end by doing the math; you can send money to family abroad, quickly.
Most Neobanks allow you to send money directly to contacts in your address book who have the same app downloaded on their mobile. So much for the time and cost of a wire transfer! All transactions are free and immediate.
- Everything at your fingertips on a single screen: savings portfolios, insurance, investment packages, instant generator of prepaid cards for online payments, rate converter and many other services.
- Save and invest: a Neobank is like a personal trainer of your spending habits, it helps you achieve your goals and gives you advice on how to maximize your savings, when and wherever you want.
In addition, the security of transactions is entrusted to the most advanced encryption systems, in addition to the use of extra measures such as fingerprints, biometric parameters and facial recognition.
We recommend you to make a small and fast empirical experiment. Revolut is certainly one of the most interesting Neobanks in recent years. It is an app that you can easily download on your mobile. Browse and discover all the advantages of a Neobank in a few minutes.
The popularity of Neobanks
According to a January 2020 study on European and British neobanks, these are said to be popular mainly among millennials and zoomers. Neobanks are huge in Europe, which has about 40 startups in the sector, and especially in the United Kingdom, while outside Europe only the United States stand out.
In fact, a survey conducted by Pureprofile in August 2019 states that 21.4% of U.S. Internet users aged 18 to 91 have already used neobanks. About 57% of the same respondents said they believe that digital banking is cheaper than on-site, and 8.8% of respondents plan to open a digital-only bank account in the coming months.
One of the main problems limiting the adoption of neobanks is that customers are using their products as an additional, not the main, financial instrument.
This raises the question of whether the younger generation will put his trust in this innovation, allowing neobanks to be perceived as an equivalent of traditional banks.