There is a new buzz in the tech world every day, usually about something that would simplify tasks even more than today. Neobank is one such tech advancement that has been gaining traction in the era of digital banking.

Let’s look at what Neobank is and how to start a Neobanking platform!

What is a Neobank?

Neobanks are financial service providers that do not have a physical branch, unlike a digital bank. These banks’ wide array of online financial aid appeals to tech-savvy customers. Neobanks do not have a bank license, but they partner with other banks to provide licensed services.

In short, Neobank’s features include:

• Personalized online banking with AI-powered technology
• No physical branch or any physical capital
• Operates 24/7
• Cost-effective to both service providers and customers

   

   

  

  

  How to start a neobank?

  
  

  Neobanks fill the inadequacy gap in traditional banks while catching up to the latest technology. These rapidly growing technology entities do not have any physical footprint, and the maintenance costs are also very low. This advantage adds on to provide dynamic services to customers.

  
  

  The prerequisite to building a neobank is to learn about the customer’s needs. Good market research will help in this step.

  
  

  To start a neobank, the following are the primary steps:

  
  
  • Banking license: You can either claim a license or partner with a traditional bank with a license. Partnering with a bank is also called renting a license. You can do it very quickly in about six months.
  • Developer license: A developer license is required to build the neobanking application. The next step would be to acquire the license before building the app.
  • Building and testing: The UX/UI for neobanks is extremely important as it is one of the sharp contrast between their current digital banks. After research, mock-up, and testing, a well-thought-out front end is essential with the back end.
  • Internet presence: Your neobank might need a web presence along with the app. Set up a convenient webpage using a hosting web service. 
  
  

  How are Neobanks different from digital banks?

  
  

  Neobanks and Digital banks are two different financial institutions even though both have a common set of services. Digital banks are an extension of traditional banks, and the services offered are as wide as the latter, whereas Neobanks are exclusively online.

  
  

  They also back traditional banks that do not have an online presence by offering adequate digital services. Neobanks address conventional banking insufficiency, a much-needed requirement for banks today.

  
  

  Conclusion 

  With the space to adopt sophisticated technology while providing traditional banking services, neobanks can be placed on top. The combination of traditional banks with rooted services and a digital presence is made possible by neobanks. When unpredictable and the offline world has become inaccessible, neobanks become the best people can have. 

  
  

  Do you have an idea for building a Neobank? Contact us today!