{"id":30493,"date":"2022-03-01T04:48:28","date_gmt":"2022-03-01T04:48:28","guid":{"rendered":"https:\/\/www.i-exceed.com\/?post_type=blog&p=30493"},"modified":"2025-06-26T11:54:31","modified_gmt":"2025-06-26T11:54:31","slug":"neobanks-the-latest-disruptors-of-the-fintech-world","status":"publish","type":"blog","link":"https:\/\/www.i-exceed.com\/us\/blog\/neobanks-the-latest-disruptors-of-the-fintech-world\/","title":{"rendered":"Neobanks: The Latest Disruptors of the Fintech World"},"content":{"rendered":"\t\t
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The word \u201cbank\u201d generally creates a picture of gray, dull-looking buildings with endless queues, and employees hiding behind huge amounts of paperwork screaming the word inconvenience. With neobanks, the story is a little different. You don\u2019t need to visit a solemn-looking building downtown, but complete your transactions from the comfort of your home, probably while drinking your coffee or petting your cat.<\/p>

Neobanks are the latest disruptors in the fintech world. In 2021 the global neobanking market size was valued at USD 47.39 billion and is expected to grow at a compound annual growth rate (CAGR) of 53.4% from 2022 to 2030 . The increasing demand for convenience among customers in the fintech world is expected to drive market growth. Neobanks offer banking solutions without the need for physical branches. They offer service in real-time through online channels and mobile sites.<\/p>

1 in 5 Americans over the age of 18 for their financial transactions , uses a neobank – businesses that aren\u2019t banks but provide all-digital access to a \u201creal\u201d bank account, along with features and a UX specifically catered to their client’s sensibilities. Along with the growing adoption of smartphones and the internet across the world for digital banking is expected to further accelerate the need for neobank platforms.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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What exactly are neobanks?<\/h3>

In simple terms, neobanks refers to any service that holds your money. They are sometimes referred to as \u201cchallenger banks,\u201d and are fintech firms that provide software and other technologies to streamline mobile and online banking. They leverage technologies such as artificial intelligence (AI) and machine learning (ML) to offer personalized and customized financial services to end-users and minimize the overall operating cost. They also tend to be swifter and more transparent than their megabank counterparts.<\/p>

They started to become popular over a decade ago, although the moniker \u2018neobanks\u2019 wasn\u2019t coined then. It started when retailers and non-financial-institutions started getting into the financial domain. For example, Wal-Mart\u2019s partnership with Green Dot and offering some light banking services to their customers and employees. Likewise, some neobanks today collaborate with traditional banks behind the scenes.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Why have neobanks become popular?<\/h3>

Neobanks are filling in a void that traditional banks have left wide open with their low-cost banking services with low or no-minimum deposit requirements. That relates better with today’s customers\u2019 needs, along with an impressive UX experience and the convenience of probably never having to set foot in a physical branch. Among the best-known and most successful neobanks in the US are Chime, Current, Dave, Greenlight, MoneyLion, and SoFi. Each entity offers pricing and features exclusively created for its target audience.<\/p>

Neat, a Hong Kong-based neobank has the provision of providing a fully digital, AI-assisted onboarding process (Appzillon AI onboarding)<\/a>. Whereas in a traditional bank, you need to be physically present with a set of documents for validation. The process itself is tedious and time-consuming.<\/p>

The prolific characteristic of these neobanks is placing customers at the center of their business model, with all decisions flowing from that customer-centric perspective.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Wins and falls of neobanks<\/h3>

Neobanks are still in their nascent stage. This is because their growth and adoption mostly rely on government rules and regulations. Having said that, the benefits of neobanks can\u2019t be ignored. They have taken the term \u2018banking on your fingertips\u2019 to a different zenith. Their service speed can be calculated in minutes, unlike the traditional banks where the measuring unit can be days or months.<\/p>