Those of you new to neobanks should know these are banks that operate strictly online without any physical locations. They've revolutionised how banks work across the world, including here in the U.K. and the U.S.
They've also innovated in the way of keeping their customers' banking transactions safe. The technology they use keeps up with a newer generation of people who prefer digital banking, yet still want added security.
What kind of technologies are neobanks using nowadays? Let's look at examples of how a core banking software helps.
Why Neobanks are Becoming Preferred
One reason neobanks continue to flourish is they accommodate those who don't want to deal with low bank account fees or other fees that drain their finances. Being able to bank online with a trusted source offering more convenient methods to small business owners or freelancers is only going to grow.
At the same time, FinTech banks keep bringing innovative ways to connect with their customers. Most of this occurs through mobile devices where all neobanks users do their banking.
According to sources like Medium, just about every age group now does banking on a mobile device. Those between 18-34 do so with a smartphone app.
To make this work seamlessly, how do neobanks bring safer banking to their clients? Two specific methods currently integrate into the financial industry for further convenience.
A more customer-centric experience through FinTech banking systems requires more implementation of Banking-as-a-Service (or Baas). The "as a service" cloud model is already mainstream to make software or technology more accessible on mobile devices for use anywhere.
Through use of APIs, a BaaS platform works efficiently for neobanks, not including customisation features for more complicated financial manoeuvres.
At the same time, these apps eliminate high fees to the user and offer quick processing times. Only those familiar with using innovative app technology are comfortable using neobanks, though.
Even though neobanks are defined as being independent of traditional banks, they're also teaming up with physical banks to create a direct-to-bank integration system.
Real Banks Partnering with FinTech Banking
More banks around the world set up partnerships with neobanks to hold accounts or funds. This emerging integration allows real banks to bring more innovative technology to their own banking systems.
The only challenge for neobanks doing such partnerships is they have to deal with more compliance issues. Plus, they need to pay more attention to user support, which can only help them become more appealing to everyone.
Having traditional banks assimilate with neobanks adds something positive for each while bringing easier ways to bank for customers along the way.
What kind of banking software helps neobanks thrive? A look at specific features tells you how neobanks can continue to innovate in the years ahead.
Bringing Productivity and Customer Engagement
For neobanks to move to the next level, they'll need to integrate app features like financial intelligence to bring interactive reports and automated workflows/processes. They'll also need more agile banking tools to help customise to the needs of customers. Multilingual user interfaces are just as important.
Loan management tools are equally essential with ways to easily track communications with clients. Incorporating these features into an app that makes it easy to communicate and customise for branding makes neobanks operate just like a real bank.
Most important is to use banking software with the utmost privacy and security to nurture trust both ways.