Neobank

{{Main|Neobanks in Europe}}

The term “neobank” gained popularity in 2019, but term’s origins are older.{{cite web | title=Neobankerna är här | website=KTH Royal Institute of Technology | date=2019-09-10 | url=https://www.kth.se/om/nyheter/centrala-nyheter/neobankerna-ar-har-1.923592 | archive-url=https://web.archive.org/web/20240622105220/https://www.kth.se/om/nyheter/centrala-nyheter/neobankerna-ar-har-1.923592 | archive-date=2024-06-22 | url-status=live | language=sv | access-date=2024-06-22 | quote=Den som gör en sökning i olika mediedatabaser på ordet neobanker kan notera att de börjar dyka upp runt 2017 i olika tidningar och annan media. Det är emellertid först i år, 2019, som användning av ordet tar fart. Och det på allvar.}} The term is used to describe fintech-based financial providers that were challenging traditional banks. There were two main types of company that provided services digitally: companies that applied for their own banking license and companies in a relationship with a traditional bank to provide those financial services. The former were called challenger banks and the latter were called neobanks.

The term "challenger bank" is used in the UK to refer to a number of fintech banking startups that emerged in the wake of the 2007–2009 financial crisis. Their services may be accessed by clients through their respective computers or mobile devices.

Neobanks are operational in Australia and include banks such as Up, Judo, Alex.{{cite web |archive-url=https://archive.today/20240829063354/https://www.canstar.com.au/savings-accounts/neobanks/ |archive-date=29 August 2024 |access-date=29 August 2024 |date=21 June 2023 |first=Alasdair |last=Duncan |editor-first=Nina |editor-last=Tovey |title=Neobanks: what are they and what are your options? |work=Canstar |url=https://www.canstar.com.au/savings-accounts/neobanks/ |url-status=live}}

The concept of neobanks was first noted in Bangladesh around 2020.{{Cite web |title=Bank Asia to establish neobank |url=https://thefinancialexpress.com.bd/trade/bank-asia-to-establish-neobank-1598934589 |access-date=2024-03-26 |website=The Financial Express |date=1 September 2020 |language=en |archive-date=29 August 2024 |archive-url=https://web.archive.org/web/20240829070714/https://thefinancialexpress.com.bd/trade/bank-asia-to-establish-neobank-1598934589 |url-status=live}}{{Cite web |last=Parvez |first=Sohel |date=2023-08-06 |title=NRB Bank plans to introduce neo-banking services |url=https://www.thedailystar.net/business/economy/news/nrb-bank-plans-introduce-neo-banking-services-3387401 |archive-date=29 August 2024 |archive-url=https://web.archive.org/web/20240829070939/https://www.thedailystar.net/business/economy/news/nrb-bank-plans-introduce-neo-banking-services-3387401 |url-status=live |access-date=2024-03-26 |website=The Daily Star |language=en}} These banks would be digital only with customer accounts not connected to any particular branch.{{Cite web |last=Hasan |first=Md Mehedi |date=2024-01-25 |title=Bangladesh plans more licences for digital banks in push to go cashless |url=https://www.thedailystar.net/business/news/bangladesh-plans-more-licences-digital-banks-push-go-cashless-3527496 |access-date=2024-03-26 |website=The Daily Star |language=en |archive-date=29 August 2024 |archive-url=https://web.archive.org/web/20240829064543/https://www.thedailystar.net/business/news/bangladesh-plans-more-licences-digital-banks-push-go-cashless-3527496 |url-status=live}}

In India, a neobank is a class of digital-only or online bank that operates without physical branch locations.{{Cite web|last1=Vaidhyanathan|first1=Jaya|last2=Aashika|first2=Jain|date=31 July 2024|title=What Is Neobanking And How Does It Work?|url=https://www.forbes.com/advisor/in/banking/what-is-a-neobank/|access-date=2023-10-21|website=Forbes Advisor|language=en-US|archive-date=29 August 2024|archive-url=https://web.archive.org/web/20240829070304/https://www.forbes.com/advisor/in/banking/what-is-a-neobank/ |url-status=live}} They typically have lower operational costs, which can sometimes result in lower fees and more competitive interest rates for their customers. Neobanks often partner with well-established, traditional banks to provide services and adhere to regulations.

Neobanks in India typically offer a range of financial services, including savings accounts, current accounts, debit and credit cards, and other banking services. They focus on providing a seamless and user-friendly digital banking experience to a younger audience, with features like instant account setup, easy money transfers, and expense tracking. Some neobanks also target specific customer segments, such as millennials, and offer features like budgeting tools and investment options to that demographic.

Indian neobanks primarily operate in Indian rupees and may have limited cross-border services. International transactions are often handled in partnerships with traditional banks. Federal Bank has partnered with Jupiter and Fi in the neo-banking space.{{cite web|url=https://www.moneycontrol.com/news/business/groww-in-talks-with-federal-bank-for-neo-banking-vertical-8243021.html|title=Groww in talks with Federal Bank for neo-banking vertical}}

Neobanks in Iran are legally digital branches of banks. Central Bank passed a limiting law in 2022 which bans banks from starting mobile "neo" bank apps that have their own core.{{cite web |first=Mahsa |last=Taati | url=https://way2pay.ir/348261/ |archive-date=29 August 2024 |archive-url=https://web.archive.org/web/20240829065018/https://way2pay.ir/348261/ |trans-title=Banking experts answered in a conversation with the payment method / instructions of the central bank; A threat to neobanks in Iran? |language=fa |url-status=live | title=دستورالعمل بانک مرکزی؛ تهدیدی برای نئوبانک‌ها در ایران؟ | date=10 December 2023 }} There are a number of active programs such as Omid Bank, Tobank, Wepod and Zpod Kidzy,{{cite web | url=https://way2pay.ir/362917/ |archive-date=29 August 2024 |url-status=live |archive-url=https://web.archive.org/web/20240829065406/https://way2pay.ir/362917/ |first=Amir |last=Javednia |trans-title=Providing micro banking facilities for children and teenagers in Kidzi |language=fa | title=ارائه تسهیلات خرد بانکی برای کودکان و نوجوانان در کیدزی | date=6 May 2024 }} Bank Mellat Plus.{{cite web | url=https://peivast.com/p/146147 |trans-title=Neobank's line is the return of the digital bank to the text |language=fa |archive-date=29 August 2024 |archive-url=https://web.archive.org/web/20240829065939/https://peivast.com/p/146147 |url-status=live| title=خط خوردن نئوبانک بازگشت بانک دیجیتالی به متن | date=8 November 2022 }} Iranians need Identity national smart cards and video confirmation to open an account.{{cite web | url=https://peivast.com/p/102221 |archive-date=29 August 2024 |archive-url=https://web.archive.org/web/20240829065722/https://peivast.com/p/102221 |url-status=live |trans-title=Electronic banking in neobank clothing |language=fa | title=بانکداری الکترونیکی در لباس نئوبانک | date=26 May 2021 }}

Report from Swedish police indicates that neobanks are popular with criminals and are frequently used in criminal transactions.{{cite web | title=Neobanker: En rapport om neobanker och deras risker relaterade till penningtvätt och finansiering av terrorism | url=https://polisen.se/siteassets/dokument/finanspolisen/rapporter/neobanker.pdf | access-date=2024-06-22| archive-url=https://web.archive.org/web/20240418003201/https://polisen.se/siteassets/dokument/finanspolisen/rapporter/neobanker.pdf/download/ | archive-date=2024-04-18 | url-status=dead | quote=Neobanker och deras tjänster är dock också attraktiva för kriminella aktörer som utnyttjar dessa kanaler för att tvätta sina svarta pengar eller för att finansiera allvarlig och grov brottslighet, såsom finansiering av terrorism. Underrättelser vittnar om kriminella aktörer som flitiga användare av neobanker. ({{translation|i=yes|However, neobanks and their services are also attractive to criminal actors who use these channels to launder their dirty money or to finance serious and serious crime, such as terrorism. Intelligence reports indicate that criminal actors are frequent users of neobanks.}})}}{{cite web | title=Strong risk of money laundering through neobanks, Swedish report reveals | website=Global Relay Intelligence | date=2024-08-30 | url=https://www.grip.globalrelay.com/strong-risk-of-money-laundering-through-neobanks-swedish-report-reveals/ | archive-url=https://web.archive.org/web/20250601140822/https://www.grip.globalrelay.com/strong-risk-of-money-laundering-through-neobanks-swedish-report-reveals/ | archive-date=2025-06-01 | url-status=live | access-date=2025-06-01}}

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Category:Banking terms