Everything You Need To Know About Neobanking

After hailing so many Uber rides over public transport, I can’t even imagine a time when it wasn’t around. How did nightlife thrive without it? I mean, how did the drunk even reach home? 

Over the last few decades, all the industries have undergone technological shifts that seem crucial to life as we know it today. Even though most industries underwent these shifts, banking was left behind. But fortunately, that’s changing, all thanks to the emergence of neobanking.

Media has been touting neobanks in India as the next big thing. Many people are starting to question- What are neobanks? Will neobanking transform the banking experience? Let’s find out.

What is a Neobank?

Neobanks are financial institutions that are available online-only, meaning they are a kind of digital bank that does not have any branches. Instead of being physically present at a specific location, neobanking is completely online. 

Neobanks are also called fintech firms that provide financial solutions like multi-currency accounts, payments, money transfers, investment, money lending, and more. Neobanking is the most appealing to tech-savvy consumers who prefer doing most of their work through their mobiles. 

Just like any other industry, the financial landscape is also shifting towards customer satisfaction and experience. Traditional banks have created a gap between what they offer to what customers expect. Therefore, Neobanks are here to fill this gap.

Most traditional banks crumple when it comes to providing financial services like payment gateway, multiple views of cash management, and many others. This inconsistency, along with the ignition of mobile technology, it only makes sense that banking services merge with digital technology.

Neobanks do not integrate new technologies solely for the sake of being leading-edge. In fact, by getting rid of the physical branches, neobanks often save on the costs which allows them to cut fees for the customers and expand their services. Neobank customers often enjoy higher-than-average interest rates and fewer fees due to their slimmed-down model. 

How does neobank work?

Neobank accounts are easy to set up. In most neobanking scenarios, one can establish a relationship and start to use its services without involving any physical paperwork. All you will need is to download the app and sign up.

In very few cases, neobanks are incapable of replacing traditional banks. Therefore, there are a few neobanks that allow you to link your traditional bank accounts to your neobank account to give you the best of both the worlds.

From a customer’s standpoint, neobanking may just be an app that they use for managing their money and making financial decisions. Neobank offerings are pretty similar to those at traditional banks albeit more easy and accessible. Hop Financials is a blooming player in the field of neobanking in India that has a plethora of services to offer, they generally include:

• Savings accounts
• Multi-Currency accounts
• One global card
• International money transfer
• Payment services
• Money transfer services
• Budgeting services
• Investment services
• Credit services
• Financial education tools
• Rewards
• 24*7 support

Unlike a traditional bank, neobanks have a totally different business model. One similarity can be that neobanks also earn marginally between lending and money inflow. 

As we already discussed, the absence of physical location cuts down the customer fees by a significant amount. Neobanks also provide personalized services fired up by technology to their customers as they are very customer-centric.

The decision-making process in neobanking is data-driven. Since the neobank platforms are modernized, they can easily collect and analyze data. This helps them in understanding how their customers act in the neobanking ecosystem. Based on the analysis, the neobanks create groups of customers based on their activity instead of just sticking to a few data points. 

Neobanks are also as secure as traditional banks or even more secure. We can take the example of ‘Hop’- it is a full-fledged money changer regulated by the Reserve Bank of India (RBI). Like any other bank, Hop employs a range of security measures that ensures that both your money and details are safe. Hop also provides smart app controls like freeze, block, pin-reset, etc. within the app.

What are the pros of neobanking?

As neobanks are completely online, they have a lot to offer. Neobanks in general provides a wide range of advantages for the customers. However, Hop stands out among the neobanks in India with its astonishing features. Hop opens up a wide window of advantages for you. I have listed some key points that may interest you in opting for moneyHOP:

Quick account creation

I am fully aware of the pain you go through for creating an account in your traditional bank. The process of opening up an account with a traditional bank may not be as elaborate as before, but it’s still lengthy and tedious. This tedious process is eliminated while opening an account with Hop.

As we discussed earlier, Neobanks do not have a storefront. Therefore, you don’t have to go anywhere for opening an account. Just a couple of simple steps to follow while sitting at home and your account is ready to go.

Seamless international payments

Hop provides a ‘One Global Card’ that can be used anywhere around the world. Make online payments, Withdraw from ATMs, Tap, or Swipe it anywhere around the globe. Not just this it also allows you to transfer money internationally without charging you extra. 

However, in the case of traditional banks, you mostly don’t get a card that can be used anywhere in the world. Even if they do, it requires a request for upgrade, lots of paperwork, and then finally an international debit card.

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User-friendly

Hop is all about providing an excellent customer experience. We make sure that you do not have to work through a glitchy net banking site or a mobile app that isn’t responsive. The ‘Hop-Money Matters’ app is very user-friendly, crisp, and easy to navigate. 

Unlike traditional banking apps, neobank apps are well-designed and highly responsive for making the customer’s experience better. In fact, ‘easy to use’ is the key highlight in neobank apps that make it a hit amongst its customers.

Quick reporting

Transactions made via moneyHOP go through instantly and so the transaction details are recorded instantly too. This provides you with an up-to-date balance of your account, at all times. All the payments and transactions can be found on the app and so, you don’t have to go anywhere for this information. 

Overview of your expenses 

With Hop, your expenses won’t be a mystery anymore. It allows you to track all your expenditures in one place. Hop also allows you to set daily or monthly budgets to help you have better control over your finances. This helps you in managing your finances in a very informed manner. 

Just like Hop, all neobank apps provide you with an overview of your expenses by categorizing them for your convenience. Neobank apps also have a savings goal feature that can be customized to best suit your requirements. 

All in one

The Hop app is literally loaded with features. You can do everything possible with your money in an app. All features from, on-app spend notifications, international money transfer, best interest rates, instantly updated transactions, investment, and what not!

Neobanks are known for allowing their customers to do the majority of their banking through a smartphone app. So many features also make basic banking tasks very easy and accessible for you.

Super Safe

Hop is a full-fledged money changer regulated by the Reserve Bank of India (RBI). Therefore, money deposited with Hop is not only secure as it would be in a regular bank but also easily accessible. Hop employs a range of security measures that ensures that both your money and details are safe.

In fact, neobanks are 10x better than banks at keeping your money secure by providing you with features like freeze, block, pin-reset, etc. with one app. As neobanking gives you the convenience of banking with your mobiles, some security responsibility also falls on the user – just like using an app with your current bank. 

Neobank vs. Traditional Bank

The fundamental difference with Neobanks vs. traditional banks is that neobanks are usually more convenient for those who are deterred by the traditional banks dominating the high street. That is the reason why neobanks are also known as ‘challenger banks’.

By and large, neobanks and traditional banks have the following differences

The road ahead

Neobanks are the new wave as it has completely revolutionized how banking was done. Neobanks have transformed banking to easy and convenient from too complicated to comprehend. Banking is no more linear with neobanks.

Neobanks can’t just capitalize on the momentary success if they want to survive. What they need is to carve a niche for themselves by offering features that cannot be done without. And this is what we, at Hop are determined to do each day.

We are very excited to find out how the market responds. We are also exhilarated to see how the regulatory hurdles pan out and when they do, we would love to keep you in the loop. Happy Banking!