Many people believe neobanks are digital-only banks, but it goes one step further than this.
Neobanks are licensed banks that operate solely through smartphone apps. This means they aren’t accessible on websites, unlike traditional online banking.
And don’t expect to be able to demand assistance from a real person at a bricks-and-mortar branch – there aren’t any.
So, at the end of the day, you can still do – or will be able to do – things you do at your traditional bank, such as open a transaction account or transfer money, with these newer players.
Currently, there are still limitations to what services some neobanks can provide, such as loans, but this would vary from bank to bank.
The digital, flexible nature of these platforms means neobanks tend to be geared towards the younger generations. That doesn’t mean it’s only for millenials though; anyone who prefers online self-service or anyone who just wants to break free from the big banks’ control could benefit from neobanks.