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The term Neobanks has been making waves in the financial ecosystem lately. If you’ve found yourself wondering—What exactly is a neobank? Are they real banks? Do they have a future?—you’re not alone. This blog unpacks everything you need to know about neobanks and their growing relevance in the modern digital economy.
Traditional banks, governed by heavy regulatory frameworks, often struggle to offer customer-first experiences. That’s where neobanks step in—redefining banking by making it as intuitive as booking an Uber. These digital-only banks operate primarily through mobile apps, bringing banking to your fingertips.
Neobank apps are sleek, user-friendly, and purpose-built to help users improve their financial habits. With no tedious paperwork or long queues, they cater to the needs of a digitally native generation that expects speed, personalization, and convenience from financial services.
Neobanks have emerged as a refreshing alternative in a world where banking is often slow and fragmented. Here’s how they stand apart:
Lower Fees: Neobanks typically operate at lower costs, offering minimal to zero maintenance charges.
Mobile-First Convenience: From opening accounts to managing transactions, everything happens right from your smartphone.
Faster Processing: With modern technology, neobanks deliver quicker approvals and real-time processing for deposits and loans.
Small Ticket Loans: While large banks often overlook small loans, neobanks focus on them—often at competitive interest rates.
Smart Insights: They provide spending analytics, budgeting tools, and personalized recommendations to promote financial wellness.
The neobanking ecosystem is diverse, consisting of both licensed and non-licensed entities:
Over-the-Top (OTT) Neobanks: These are fintech platforms without banking licenses that partner with traditional banks to offer digital banking services.
Licensed Neobanks: Some neobanks have acquired virtual banking licenses and operate as fully regulated digital banks.
Digital Banks by Traditional Players: Legacy banks are also launching 100% digital services. However, these platforms don’t always qualify as true neobanks.
In India, pure digital banking is not yet formally recognized by the RBI. As a result, most neobanks operate under a partnership model with licensed banks, layering innovative services over the banks’ core infrastructure.
According to a study by Bain & Company spanning 22 countries, digital channels are now the preferred medium for purchasing banking products. Since 2017, digital banking adoption has grown by 2% to 16% across markets—signaling a clear shift in consumer behavior.
With their simplicity, speed, and cost-effectiveness, neobanks are not just a trend—they represent the future of financial services. As digital maturity grows, so will the demand for seamless and intelligent banking solutions.
At CARD91, we understand the pulse of modern banking. Our full-stack card issuance infrastructure is designed to empower neobanks and fintechs to go live faster, offer smarter card products, and unlock new revenue streams. Whether you’re launching a neobank or scaling your digital financial offering, CARD91 delivers the technology backbone to power secure, agile, and future-ready solutions.
To know more about our offerings connect with our experts
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