One of the industry’s responses to a decade of fast-paced technological growth, neobanks defy traditional banking by foregoing physical branches and betting everything on digital.
These customer-centric banks focus on delivering a holistic service for payments and money management to consumers who value the convenience of managing their finances and payments on the go and at a glance.
For a long time neobanks were still lagging behind traditional banks when it comes to payments. However, these fintechs have evolved rapidly on this dimension, adding features that enable users to pay people nearby, send payment requests, and offer support for services like Apple Pay and Google Pay. This progress has enabled neobanks to match incumbents on the payments front while staying ahead on several others.
Today, 73% of all consumer interactions with banks are done digitally. While traditional banks have invested in their own web and mobile platforms, they still fail to catch up with the capability of their neo-counterparts. On average, neobanking apps are adding nearly double the number of new features and deliver almost three times more app updates per year when compared with traditional banking apps. They also excel in terms of performance, running 42% faster than incumbents. It’s not at all surprising that this focus on the customer experience has resulted in the user satisfaction ratings for neobanks in the US (90%) being much higher than that of traditional banks (66%).
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