[Term of the Day]:Neobank
Definition — What is Neobank?
The term Neobank literally means “new bank”, derived from the Greek word νεος (neos) meaning “new”. It is an umbrella term for the new generation of cutting-edge, fully digital banking services aiming to be more accessible than traditional banks. Neobank can be called a truly branchless digital bank. Instead of physical branches, neobanks have their presence entirely online. The concept of neobanks has become an attraction for tech-savvy people who prefer managing their money through mobile phones or tablets. The whole idea of banking is without physical branches, started trending and has grown huge during this pandemic. No bank can have tie-ups with the small banks that help in offering attractive interest rates on savings accounts. The main objective of neobanks is to offer such a level of seamless customer experience that no traditional bank could ever offer. Neobanks are also known to be faster and cheaper. Neobanks also save on banking costs thus allowing them to reduce fees and avail their services to the underbanked. The global neobank market was worth USD 20.8 billion in 2020 and is expected to accelerate at a compounded annual growth rate (CAGR) of around 54.7% between 2020 and 2027, generating around USD 404 billion by 2026. When it comes to customer satisfaction, neobanks are way ahead of traditional banks. A recent study has shown that around 90% of users in the US are satisfied with neobanks. This number is interesting as the top 50 global banks only managed to satisfy 66% of the users.
eobanking is the perfect example of how convenient banking can be for users. Consumers across the world already like this new, fast, and convenient form of banking.