Neobank: what is, feautres and advantages

Many users are seduced by the new banking models, but what is a neobank? What are the advantages of neobanks? If you are also one of those who fails in financial education, you will be interested in the principal keys to the wave of fintech banking.

In recent years, the banking sector crisis has manifested in many and several ways. Due to the high distrust of customers in the traditional banking system, and to the increasingly digital profile of the population, one of the answers has been the reformulation of the traditional bank concept; what is known today as neobanks.

So, the need to transfer the digital revolution to banking, and the need to grant customers more comfort in the daily control of their expenses, caused the birth of the new bank generation.

What is a neobank?

Neobank is the word used to refer to those technological financial companies whose purpose is to meet the basic financial needs of a very specific group of people.

An audience not interested in overly sophisticated financial products, which communicates through digital channels and doesn’t need physical offices.

Advantages of neobanks

What does a neobank offer? Financial services whose distinction, compared to traditional banks, lies in a better customer experience and personalization through digital channels (mainly mobile) and cost reductions. These are precisely the main advantages of a neobank.

Neobanco vs Challenger Banks

Despite the fact they call themselves as “banks,” it is possible to distinguish two big groups:

Companies without a banking license which deal only with the customer service. These “banks” have an electronic money license or obtain it through third parties; They need a traditional bank to carry out any type of operation.

These companies don´t seek to manage customers’ money in a traditional sense, but instead focus on developing financial apps that offer a mobile-first experience, a language close to the target audience and maximum customization, thanks to Artificial Intelligence.

Here, the user transfers money from an account in an entity and operates with a ‘wallet’ with which he can also have a debit card.

Example: Yolt.

Credit institutions, financial companies with banking license and, therefore, can directly manage fiat money.

These are entities similar to the traditional ones, but 100% digital.

This group of companies are known as Challenger Banks.

It should be noted that the vast majority of Challenger Bank began as Neobanks, without a banking license, and expanded their business model, obtaining the license, until it became Challenger Bank.

Example: Revolut, N26

Neobank or traditional bank?

Traditonal bank, Neobank… None! In Bitsa we go one step further. No bank accounts, no fine prints…

We are a fintech that stands as the alternative to traditional financial institutions. We offer a prepaid card easily rechargeable from the application, with which to do all your operations quickly and safely.

In addition, we make it easy for you! Because you can recharge your card with vouchers in stores, with other cards, with transfers or with cryptocurrencies!

Now that you know what neobank means, we encourage you to discover what Bitsa means and the five reasons to trust Bitsa Card.