An Ultimate Guide On How To Create A Neobank: Features and Development Process
A lot of traditional banks are brick-and-mortar and their services are more expensive and attract customers less. This is why the need for neoBanks comes into play. If you’re one of the people who consider, “Why not build a new bank that uses top-notch technologies to offer digital-only banking services?” This article is perfect for you.
The explosion in fintech financing has seen massive amounts of money flow into what is referred to as neoBanks. These are digital banks that offer banking services using the most innovative techniques.
NeoBank is a natural step in the development of financial institutions. It came into existence in response to the desire to streamline services to the maximum extent possible and to reduce the number of interactions with bank staff. It is, in essence, an opposition to misplaced scale and a focus on marketing.
Every country today with the normal advancement of electronic technology is home to at minimum one Neobank. This means that despite the ease and efficiency of the process the neo-banking market isn’t over-saturated. And the earlier you can try something similar and the greater chance you’ll have of obtaining an original product that will be a huge hit with customers.
Do not forget that neo bank isn’t only an app on your phone, but an entire set of services that require the highest security, an organized technical infrastructure as well as the best quality of user-friendliness. Furthermore, it requires a top development team as well as a substantial investment to make the result worth the effort.
What is Neobank and its Workflow?
Neobank is a fintech digital institution that offers standard banking services (loans, savings and investments accounts, and credit cards) but is not an actual bank legally (no licensing for banking). Neobank has no physical office and almost none of the cash machines since every issue is solved by the use of a mobile application. The basic idea behind offering financial services through the digital format was designed to anticipate the needs and demands of the user and resolve them in just only a few clicks and without lengthy and tiring phone calls or — perhaps even more important — not having to wait in lines to see a “live” consultant.
The most well-known examples of Neobanks comprise U.S.-based Chime and UK-based Revolut. In addition, Chime is the largest of the two. The U.S. and UK are the top two countries in this field based on the number of transactions.
The market size in 2021 was estimated to be approximately $47 billion. This market is projected to expand by an average rate per year of 53.4 percent until 2030 to increase to $2.05 trillion. The cost of transactions per customer in the neobanking sector will be $18.21 thousand by 2022.
The past five years have seen the most rapid growth of alternative banking services. The main reason behind this is the increasing discontent of customers with the difficulties of traditional banking that resulted in a hunt for simpler and less costly options.
What is a NeoBank in 2023?
There’s a belief that neobank is only available to those who are young and have a basic understanding of digital however this is not the case. The truth is that Neobank’s clients are males (58 percent) as well as women (42 percent) aged between 25 and 44. The EU, Britain, and the U.S. are at the top of the list of downloads. But, a growing percentage of the population 65 and over are enjoying the benefits of digitalization.
To attract customers, Neobanks adopt a more friendly manner or what is known as “new sincerity”. Customer service can communicate with you like a long-time companion, not as an insincere, polite conversation. The application is designed to allow you to find every option within only a few clicks even if you don’t have a clue as to the location. There are gamification features with no commissions, low interest, and favorable cashback. All of these will encourage customers to make use of neobank to the maximum extent feasible. This kind of environment is achieved by reducing the cost of infrastructure for projects.
Why Should You Start NeoBank in 2023?
NeoBanking is a project with advantages that make it feasible and repaid in an extremely short time frame:
- A niche that isn’t full
- Attractiveness for clients thanks to easy communications
- Flexible compared to traditional banks.
- A high investment appeal
You can build your neobank completely from the ground up or utilize a pre-made solution that has more options and capabilities that make you stand out from the other rivals. Neobank software allows you to incorporate and enhance features much faster than traditional software. Neobanks are based on advanced processes automated, internet services, and APIs, to provide customers and banks with high profits security, flexibility, and security.
It is also possible to create an entity that is a subsidiary of a traditional bank, however, there are some distinctions.
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