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{{short description|Online-only direct bank}} |
{{short description|Online-only direct bank}} |
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{{Banking |banks}} |
{{More citations needed|date=March 2024}}{{Banking |banks}} |
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A '''neobank''' |
A '''neobank''' is a type of [[direct bank]] that operates exclusively using [[online banking]] without traditional physical [[branch (banking)|branch networks]], thus challenging traditional banks.<ref name=":0">{{cite report|archive-date=29 August 2024|archive-url=https://web.archive.org/web/20240829071332/https://www.bbvaresearch.com/wp-content/uploads/2016/01/DEO_Jan16.pdf|url-status=live|date=January 2016|title=Digital Economy Outlook|url=https://www.bbvaresearch.com/wp-content/uploads/2016/01/DEO_Jan16.pdf|publisher=[[BBVA]] Research|page=12}}</ref><ref>{{cite web |title=The unstoppable rise of neobanks |url=https://www.worldfinance.com/banking/the-unstoppable-rise-of-neobanks |archive-date=29 August 2024 |archive-url=https://web.archive.org/web/20240829071554/https://www.worldfinance.com/banking/the-unstoppable-rise-of-neobanks |url-status=live |work=[[World News Media|World Finance]] |first=Barclay |last=Ballard |date=October 11, 2018 |access-date=31 December 2018}}</ref><ref>{{cite news |title=What is a neobank? |url=https://www.business-standard.com/podcast/finance/what-is-a-neobank-122050600048_1.html |access-date=14 May 2022 |archive-date=29 August 2024 |url-status=live |archive-url=https://web.archive.org/web/20240829071706/https://www.business-standard.com/podcast/finance/what-is-a-neobank-122050600048_1.html |work=[[Business Standard|Business Standard India]] |date=6 May 2022}}</ref> |
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==Europe== |
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The range of services provided by neobanks is not as broad as that of their traditional counterparts. Unlike incumbent banks, a large portion of the income of neobanks is mainly made up of transaction fees received when customers pay with their debit card.<ref>{{Cite web|last=Walden|first=Stephanie|date=2021-06-24|title=What Is A Neobank?|url=https://www.forbes.com/advisor/banking/what-is-a-neobank/|access-date=2021-11-21|website=Forbes Advisor|language=en-US}}</ref> |
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{{Main|Neobanks in Europe}} |
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==History== |
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The term ''neobank'' has been in use since at least 2016<ref name=":0" /> to describe fintech-based financial providers that were challenging [[bank|traditional banks]]. There were two main types of company that provided services digitally: companies that applied for their own [[banking license]] and companies in a relationship with a traditional bank to provide those financial services. The former were called challenger banks and the latter were called neobanks. |
The term ''neobank'' has been in use since at least 2016<ref name=":0" /> to describe fintech-based financial providers that were challenging [[bank|traditional banks]]. There were two main types of company that provided services digitally: companies that applied for their own [[banking license]] and companies in a relationship with a traditional bank to provide those financial services. The former were called challenger banks and the latter were called neobanks. |
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The term "[[challenger bank]]" is used in the [[United Kingdom|UK]] to refer to a number of [[Financial technology|fintech]] banking startups that emerged in the wake of the [[2007–2008 financial crisis|2007–2009 financial crisis]]. Their services may be accessed by clients through their respective [[Computer|computers]] or [[Mobile device|mobile devices]]. |
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== Notable neobanks == |
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According to Dealroom.co<ref>{{Cite web |title=Dealroom.co - European Challenger List |url=https://app.dealroom.co/lists/11683/list?showGrid=false&showTransactions=false&showStats=true}}</ref> the most notable neobanks in Europe are the below: |
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== Oceania == |
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# [[Monzo]] |
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# [[Chime (company)|Chime]] |
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=== Australia === |
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# [[N26]] |
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Neobanks are operational in [[Australia]] and include banks such as [[Up (Australian bank)|Up]], [[Judo Bank|Judo]], [[Alex Bank|Alex]].<ref>{{cite web |archive-url=https://archive.today/20240829063354/https://www.canstar.com.au/savings-accounts/neobanks/ |archive-date=29 August 2024 |access-date=29 August 2024 |date=21 June 2023 |first=Alasdair |last=Duncan |editor-first=Nina |editor-last=Tovey |title=Neobanks: what are they and what are your options? |work=Canstar |url=https://www.canstar.com.au/savings-accounts/neobanks/ |url-status=live}}</ref> |
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# [[Revolut]] |
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# [[Starling Bank]] |
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== Asia == |
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# [[OakNorth Bank]] |
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# [[Zopa]] |
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=== Bangladesh === |
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# [[Atom Bank]] |
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The concept of neobanks was first noted in [[Bangladesh]] around 2020.<ref>{{Cite web |title=Bank Asia to establish neobank |url=https://thefinancialexpress.com.bd/trade/bank-asia-to-establish-neobank-1598934589 |access-date=2024-03-26 |website=[[The Financial Express (Bangladesh)|The Financial Express]] |date=1 September 2020 |language=en |archive-date=29 August 2024 |archive-url=https://web.archive.org/web/20240829070714/https://thefinancialexpress.com.bd/trade/bank-asia-to-establish-neobank-1598934589 |url-status=live}}</ref><ref>{{Cite web |last=Parvez |first=Sohel |date=2023-08-06 |title=NRB Bank plans to introduce neo-banking services |url=https://www.thedailystar.net/business/economy/news/nrb-bank-plans-introduce-neo-banking-services-3387401 |archive-date=29 August 2024 |archive-url=https://web.archive.org/web/20240829070939/https://www.thedailystar.net/business/economy/news/nrb-bank-plans-introduce-neo-banking-services-3387401 |url-status=live |access-date=2024-03-26 |website=The Daily Star |language=en}}</ref> These banks would be digital only with customer accounts not connected to any particular branch.<ref name="Hasan">{{Cite web |last=Hasan |first=Md Mehedi |date=2024-01-25 |title=Bangladesh plans more licences for digital banks in push to go cashless |url=https://www.thedailystar.net/business/news/bangladesh-plans-more-licences-digital-banks-push-go-cashless-3527496 |access-date=2024-03-26 |website=[[The Daily Star (Bangladesh)|The Daily Star]] |language=en |archive-date=29 August 2024 |archive-url=https://web.archive.org/web/20240829064543/https://www.thedailystar.net/business/news/bangladesh-plans-more-licences-digital-banks-push-go-cashless-3527496 |url-status=live}}</ref> |
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# [[Qonto (neobank)|Qonto]] |
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# [[Wise (company)|Wise]] |
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=== India === |
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# [[Adyen]] |
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In [[India]], a neobank is a class of digital-only or online bank that operates without physical branch locations.<ref>{{Cite web|last1=Vaidhyanathan|first1=Jaya|last2=Aashika|first2=Jain|date=31 July 2024|title=What Is Neobanking And How Does It Work?|url=https://www.forbes.com/advisor/in/banking/what-is-a-neobank/|access-date=2023-10-21|website=Forbes Advisor|language=en-US|archive-date=29 August 2024|archive-url=https://web.archive.org/web/20240829070304/https://www.forbes.com/advisor/in/banking/what-is-a-neobank/ |url-status=live}}</ref> They typically have lower operational costs, which can sometimes result in lower fees and more competitive [[Interest rate|interest rates]] for their customers. Unlike in Europe, the regulatory environment in India is complex, with stringent regulations that govern banking and financial services. Neobanks often partner with well-established, traditional banks to provide services and adhere to these regulations. |
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# [[Bunq]] |
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# [[Viva Wallet Group|Viva Wallet]] |
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Neobanks in India typically offer a range of financial services, including [[Savings account|savings accounts]], [[Transaction account|current accounts]], [[Debit card|debit]] and [[Credit card|credit cards]], and other banking services. They focus on providing a seamless and user-friendly digital banking experience to a younger audience, with features like instant account setup, easy money transfers, and expense tracking. Some neobanks also target specific customer segments, such as [[millennials]], and offer features like budgeting tools and investment options to that demographic. |
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# [[Monese]] |
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# [[Tandem Bank|Tandem]] |
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Indian neobanks primarily operate in [[Indian rupees]] and may have limited cross-border services. International transactions are often handled in partnerships with traditional banks. [[Federal Bank]] has partnered with Jupiter and Fi in the neo-banking space.<ref>{{cite web|url=https://www.moneycontrol.com/news/business/groww-in-talks-with-federal-bank-for-neo-banking-vertical-8243021.html|title=Groww in talks with Federal Bank for neo-banking vertical}}</ref> Federal Bank has adopted a "branch-light, distribution-heavy" model. |
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# [[Nubank]] |
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=== Iran === |
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Neobanks in [[Iran]] are legally digital branches of banks. [[Central Bank of Iran|Central Bank]] passed a limiting law in 2022 which bans banks from starting mobile "neo" bank apps that have their own core.<ref>{{cite web |first=Mahsa |last=Taati | url=https://way2pay.ir/348261/ |archive-date=29 August 2024 |archive-url=https://web.archive.org/web/20240829065018/https://way2pay.ir/348261/ |trans-title=Banking experts answered in a conversation with the payment method / instructions of the central bank; A threat to neobanks in Iran? |language=fa |url-status=live | title=دستورالعمل بانک مرکزی؛ تهدیدی برای نئوبانکها در ایران؟ | date=10 December 2023 }}</ref> There are a number of active programs such as [[Omid Bank]], [[Tobank]], [[Wepod]] and Zpod Kidzy,<ref>{{cite web | url=https://way2pay.ir/362917/ |archive-date=29 August 2024 |url-status=live |archive-url=https://web.archive.org/web/20240829065406/https://way2pay.ir/362917/ |first=Amir |last=Javednia |trans-title=Providing micro banking facilities for children and teenagers in Kidzi |language=fa | title=ارائه تسهیلات خرد بانکی برای کودکان و نوجوانان در کیدزی | date=6 May 2024 }}</ref> [[Bank Mellat]] Plus.<ref>{{cite web | url=https://peivast.com/p/146147 |trans-title=Neobank's line is the return of the digital bank to the text |language=fa |archive-date=29 August 2024 |archive-url=https://web.archive.org/web/20240829065939/https://peivast.com/p/146147 |url-status=live| title=خط خوردن نئوبانک بازگشت بانک دیجیتالی به متن | date=8 November 2022 }}</ref> Iranians need Identity national smart cards and video confirmation to open an account.<ref>{{cite web | url=https://peivast.com/p/102221 |archive-date=29 August 2024 |archive-url=https://web.archive.org/web/20240829065722/https://peivast.com/p/102221 |url-status=live |trans-title=Electronic banking in neobank clothing |language=fa | title=بانکداری الکترونیکی در لباس نئوبانک | date=26 May 2021 }}</ref> |
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== See also == |
== See also == |
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* [[ |
* [[Online banking]] |
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==References== |
==References== |
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{{reflist}} |
{{reflist}} |
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{{Authority control}} |
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{{finance-stub}} |
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[[Category:Banking terms]] |
[[Category:Banking terms]] |
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Latest revision as of 04:30, 30 October 2024
 | This article needs additional citations for verification. (March 2024) |
| Part of a series on financial services |
| Banking |
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A neobank is a type of direct bank that operates exclusively using online banking without traditional physical branch networks, thus challenging traditional banks.[1][2][3]
Europe
[edit]The term neobank has been in use since at least 2016[1] to describe fintech-based financial providers that were challenging traditional banks. There were two main types of company that provided services digitally: companies that applied for their own banking license and companies in a relationship with a traditional bank to provide those financial services. The former were called challenger banks and the latter were called neobanks.
The term "challenger bank" is used in the UK to refer to a number of fintech banking startups that emerged in the wake of the 2007–2009 financial crisis. Their services may be accessed by clients through their respective computers or mobile devices.
Oceania
[edit]Australia
[edit]Neobanks are operational in Australia and include banks such as Up, Judo, Alex.[4]
Asia
[edit]Bangladesh
[edit]The concept of neobanks was first noted in Bangladesh around 2020.[5][6] These banks would be digital only with customer accounts not connected to any particular branch.[7]
India
[edit]In India, a neobank is a class of digital-only or online bank that operates without physical branch locations.[8] They typically have lower operational costs, which can sometimes result in lower fees and more competitive interest rates for their customers. Unlike in Europe, the regulatory environment in India is complex, with stringent regulations that govern banking and financial services. Neobanks often partner with well-established, traditional banks to provide services and adhere to these regulations.
Neobanks in India typically offer a range of financial services, including savings accounts, current accounts, debit and credit cards, and other banking services. They focus on providing a seamless and user-friendly digital banking experience to a younger audience, with features like instant account setup, easy money transfers, and expense tracking. Some neobanks also target specific customer segments, such as millennials, and offer features like budgeting tools and investment options to that demographic.
Indian neobanks primarily operate in Indian rupees and may have limited cross-border services. International transactions are often handled in partnerships with traditional banks. Federal Bank has partnered with Jupiter and Fi in the neo-banking space.[9] Federal Bank has adopted a "branch-light, distribution-heavy" model.
Iran
[edit]Neobanks in Iran are legally digital branches of banks. Central Bank passed a limiting law in 2022 which bans banks from starting mobile "neo" bank apps that have their own core.[10] There are a number of active programs such as Omid Bank, Tobank, Wepod and Zpod Kidzy,[11] Bank Mellat Plus.[12] Iranians need Identity national smart cards and video confirmation to open an account.[13]
See also
[edit]References
[edit]- ^ a b Digital Economy Outlook (PDF) (Report). BBVA Research. January 2016. p. 12. Archived (PDF) from the original on 29 August 2024.
- ^ Ballard, Barclay (October 11, 2018). "The unstoppable rise of neobanks". World Finance. Archived from the original on 29 August 2024. Retrieved 31 December 2018.
- ^ "What is a neobank?". Business Standard India. 6 May 2022. Archived from the original on 29 August 2024. Retrieved 14 May 2022.
- ^ Duncan, Alasdair (21 June 2023). Tovey, Nina (ed.). "Neobanks: what are they and what are your options?". Canstar. Archived from the original on 29 August 2024. Retrieved 29 August 2024.
- ^ "Bank Asia to establish neobank". The Financial Express. 1 September 2020. Archived from the original on 29 August 2024. Retrieved 2024-03-26.
- ^ Parvez, Sohel (2023-08-06). "NRB Bank plans to introduce neo-banking services". The Daily Star. Archived from the original on 29 August 2024. Retrieved 2024-03-26.
- ^ Hasan, Md Mehedi (2024-01-25). "Bangladesh plans more licences for digital banks in push to go cashless". The Daily Star. Archived from the original on 29 August 2024. Retrieved 2024-03-26.
- ^ Vaidhyanathan, Jaya; Aashika, Jain (31 July 2024). "What Is Neobanking And How Does It Work?". Forbes Advisor. Archived from the original on 29 August 2024. Retrieved 2023-10-21.
- ^ "Groww in talks with Federal Bank for neo-banking vertical".
- ^ Taati, Mahsa (10 December 2023). "دستورالعمل بانک مرکزی؛ تهدیدی برای نئوبانکها در ایران؟" [Banking experts answered in a conversation with the payment method / instructions of the central bank; A threat to neobanks in Iran?] (in Persian). Archived from the original on 29 August 2024.
- ^ Javednia, Amir (6 May 2024). "ارائه تسهیلات خرد بانکی برای کودکان و نوجوانان در کیدزی" [Providing micro banking facilities for children and teenagers in Kidzi] (in Persian). Archived from the original on 29 August 2024.
- ^ "خط خوردن نئوبانک بازگشت بانک دیجیتالی به متن" [Neobank's line is the return of the digital bank to the text] (in Persian). 8 November 2022. Archived from the original on 29 August 2024.
- ^ "بانکداری الکترونیکی در لباس نئوبانک" [Electronic banking in neobank clothing] (in Persian). 26 May 2021. Archived from the original on 29 August 2024.
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