Introduction
Neo bank is a Challenger bank because it has many characteristics that traditional banks do not have.
Neo bank is 100% digital and can be accessed from anywhere as far as there is internet the most fascinating part of digital banking or neo banking is the fact that is offered 24-hour services so you can open your account transfer money manage your account the way you want anytime of the day, this makes life easier for consumers.
In recent years due to the advancement of technology digital banking has been the choice of the people and this poses great challenge to traditional Banks, neo bank do not need physically infrastructure to offer competent services.
Example of Neo bank in Nigeria.
There are only few of Neobanks in Nigeria, many have come and couldn't stay but currently there is Kuda bank, monie point, palmpay and Opay.
Most people use this Neo banks for cryptocurrency transactions and its very fast with no complaints.
Hopefully they will continue.
Benefits of Neo bank.
Neo bank has been able to change consumers preference and gain momentum globally because they leverage artificial intelligence, cloud computing, mobile apps and this makes it easier for consumers to open account faster with less fees.
Neo bank practice are more transparent than traditional bank, also the improve accessibility which is far from what traditional banks practice.
The use of digital channels of neobank eliminate the need of physical contact and this enhances scalability,Neo bank prove to be different from traditional bank by tailoring the features of modern day lifestyles and they make use of innovative products like automated savings expenses tracking, budgeting tools and real payment notifications and this gives users a greater control over their account there by promoting financial literacy.
Neo bank uses learning machines algorithm and data analytics to take responsibility of consumers spending pattern their financial goals and individual preferences, digital banking value customers feedback so much because it helps them to know where to improve and how consumers view their services, this enhances engagement and promote loyalty among consumers.
Neo bank focuses on current undeserved population like gig workers immigrants freelancers so it can be said that the democratize banking service so that anyone with limited or no access to traditional banking can make use of digital platforms provided by neo bank to do any form of transaction even cross border transactions and this empowers individual and enhances financial inclusion.
Difficulties Neobanks face.
Some challenges that Challenger bank face makes it difficult for them to make much profits.
Neo Banks find regulatory compliance a challenge because as a higher regulated company there is need for license and permits and there is need to comply to other regulations from the government so to abide to all this regulations can be time consuming and require a lot of resources.
Neo bank find it very difficult to make profit because to meet up with technology updates and customers satisfaction they continue to invest or technology so they hardly generate revenue, They also face a lot of cyber attack and data breaches and to maintain customers trust there is need to take some cyber security measures.
A lot of competition with traditional Banks and this poses a challenge for neo bank to gain customers loyalty so constant innovation is needed, They have a lot of work to do especially when it comes to gaining new customers convincing them of what they offer making them move from their older bank to a digital bank is not always easy.
Blockchain Technology can help.
Blockchain technology can help neo bank solve some challenges and also improve customers experience in a large way and this is because blockchain technology is decentralized it has immutable ledger so to a larger scale blockchain technology can help.
Blockchain technology can help because all transactions will be encrypt and has a link to previous transactions so this will prevent hackers saving digital Bank from cyber attack which is the major challenge the face, even customers will be happy because verifying all transaction by themselves will increase their trust on neo bank also blockchain technology will reduce transaction fees and fasting transactions.
Smart contract will make work more easier because verification of know your customers who will be automated and even compliance check will be automated so no human error and waste of time will customers apply for loans.
Blockchain technology can enhance regulatory compliance by sharing a ledger for know your customer it can also help neobanks to become more profitable through tokenizations of assets which will increase liquidity and reduce spending of resources.
Blockchain technology can help neo bank to create new product and services that will attract and return new customers and this will make neo bank stand different from traditional Banks around them, for sure adopting blockchain technology is a solution to neo bank challenges.
Summary.
If Neobanks are decentralized they will offer a perfect service that will move thousands of people from centralized traditional banks to Neobanks, only Blockchain technology can help Neo bank achieve decentralization
Posted Using InLeo Alpha