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Neobank: The Pros & Cons Explained

Author: Innotech Vietnam
Date: 26/08/2021

Neobank is an increasingly popular keyword in the Fintech industry. However, not everyone clearly understands what Neobank is, or its advantages and disadvantages.

 

What is a Neobank?

 

neobank

 

Neobank is a kind of digital bank, with no transaction offices, no bank branches. It allows customers to open an account, manage money, register for a bank card, open a credit card, etc. through an application on a mobile phone or computer without having to go to the bank’s headquarters.

The first Neobanks appeared in the UK, after the financial crisis ended. Faced with heavy financial losses, banks could no longer support each other in lending money. This caused the UK Government to change regulations, allowing digital banks to raise capital and build an online infrastructure platform before being licensed to become banks.

Neobank was officially born from there.

 

The Pros of Neobank

 

Low fees

 

Like other online banks, Neobank has no costs associated with maintaining branches. Because there are fewer rules and no credit risk, Neobanks are able to keep their costs low. Most services are cheap and do not charge monthly fees.

 

Quickly create an account

 

Many people have experienced long wait times when opening a new account at a traditional bank. They certainly don’t want to experience it again. Meanwhile, creating an account at Neobank is simple and quick.

Customers don’t need to go anywhere to create an account, they can do it in a few simple steps through their smartphone. And they will have a Neobank account in just a few minutes!

 

Convenient payment

 

neobank

 

For traditional banks, if they want to make international payments, customers must register or upgrade their card with the bank to an international card. Only then will they be able to pay their transactions in the international environment.

Neobank has overcome this drawback when allowing transactions and foreign currency exchange at the current exchange rate.

 

High security

 

Security is always the most important factor when it comes to digital transactions. Neobank application implements 2FA (2-factor authorization), biometric verification, RBAC (Role-Based Access Control), encryption technology along with other security measures to protect customer data row.

Applications are built to ensure compliance with anti-money laundering laws, ensure customer privacy, and prevent malware attacks.

 

The Cons of  Neobank

 

Neobanks aren’t legally recognized banks

 

There is no bank charter. Instead, Neobanks often partner with a bank to insure their products. Before signing up with an Neobank, make sure it is FDIC-insured by a partner bank.

 

Usually has fewer services than traditional banks.

 

Neobanks typically have fewer services than traditional banks. Some only provide savings service, but do not provide lending service.

 

Innotech Vietnam – Neobank Application Development Company

 

At Innotech Vietnam, we strive for the creation, innovation, development, and advanced solutions. We provide a wide range of software services to meet all requirements and expectations from customers. We turn these advanced technologies into value for our customers through our professional solutions and business service worldwide.

We have done more than 200+ mobile app projects for clients worldwide in Japan, the USA, Australia, Singapore and Vietnam. We’re confident to deliver even the most complicated mobile application development project successfully in areas such as banking and financial, logistics, transportation, education, and other industries. More than 90% of companies have kept coming back to Innotech for a wide range of Mobile App Development and they enjoy the same standard of service every time. Besides, we are proud that we are trusted by many Institutions in Banking and Finance such as ACB BankTyme BankUnifimoney,…

If you are looking for an Neobank Application Development Company, contact experts at Innotech Vietnam for any questions.

 

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