Neobanks have been on the rise lately, helping many Singapore and overseas entrepreneurs manage their finances efficiently. While traditional banks still remain the dominant player in the field, many people have chosen neobanks over traditional banking to meet their financing needs. This leads to us asking:
Are neobanks the future of banking?
In this article, we will be addressing this crucial question, as well as other burning questions. We will define what is a neobank, discuss their advantages and disadvantages, before comparing the difference between traditional banking and neobanking.
What is a Neobank?
Neobanks is a financial technology firm that provides financial services to clients online only. Without any physical branch, customers and clients can only manage their finance through an online platform – website and/or app.
What are the Key Differences between Neobanking and Traditional Banking?
Most neobanks rent their bank licenses from big and well-known banks as the process is too bureaucratic and expensive for neobanks. On the other hand, traditional banks are fully licensed and chartered.
Furthermore, it is incredibly easy for customers and clients to onboard with a neobank and can be completed within a few minutes through online platform. However, to sign up with a traditional bank, the process is usually more tedious and time-consuming as the bank requires you to submit lots of paperwork before your application is processed.
Lastly, traditional banks usually implement a mixture of physical branches and online to deliver their service to you. In contrast, neobanks are 100% digitalised. This makes managing your finances more efficient, as you can access your finance from your smartphone or computer.
Why Should You Use Neobanks For Business?
In the world of neobanks, technology reigns supreme. These digital-savvy banks boast top-notch apps powered by artificial intelligence (AI) and cloud analytics, delivering a customer experience that puts traditional banks to shame. If you're a tech aficionado who prefers tapping away on your phone rather than chatting up a teller, switching to a neobank is a no-brainer!
But here's the kicker: neobanks aren't burdened by the same regulations as traditional banks. That means lower operating costs, reduced credit risk, and faster registration approval. And guess what? Some even offer free business account sign up, like us!
Neobanks not only excel in offering superior products and customer experience through their advanced technology, but they also bring incredible benefits in international transfers and multi-currency accounts. Say goodbye to sky-high fees and complicated processes when sending money overseas. Neobanks streamline the process and offer low foreign transfer rates, saving you both time and money.
Plus, with a multi-currency account, you can effortlessly manage different currencies and avoid the hassle of constantly converting funds. It's like having a passport for your money! So, why settle for less when you can enjoy the convenience and cost-saving benefits of neobanks?
What are the Downsides of Neobanking?
If you are not tech-literate, Neobanks can be frustrating initially. Neobanks are likely not suitable for you if you are unable to keep up with the latest technological trend.
Secondly, as mentioned earlier, neobanks are not fully chartered or licensed. Hence, you might not have legal solutions or financial officials to assist you when you face any problems with the app, service, or non-regulated third-party service providers. This may be risky if you have unfortunately selected a neobank that ran into financial trouble. It is extremely vital that you do your research on the various neobanks to ensure your money will be insured.
Third, if you need business loans, neobanks are unlikely to give you what you need. While this landscape is slowly changing with time, neobanks do not offer a big amount of business loans to their clients. To attain business loans, ultimately, you would still need to head to a traditional bank to obtain your loan. Furthermore, for such a complex and important financial transaction, it is easier to go down to a physical bank to do the job.
Are Neobanks the Future of Banking?
Based on current trends, neobanks are very likely to become industry leaders in banking. The future of our society is one in which technology will be present in almost all aspects of our lives. This means that businesses that place technology at the center of their product offerings will likely become dominant players in their respective industries.
Grow with Us!
If you're tired of the hassle of signing up for a traditional bank account for your business, it's time to embrace the digital era. Opening a business account digitally is the way to go, and we're here to make the process a breeze.
To ensure seamless business account creation, we offer a complimentary onboarding call. Our team will guide you every step of the way, answering any questions you may have and ensuring that you have a smooth experience.
Don't hesitate to reach out to us with any inquiries about our services. Let's make your journey to a digital business account as effortless as possible.
