What is NeoBank and Are They Actually Helpful?

Banking has come a long way in the last few years. With more demand for faster transactions, the top banks in the US have done their part in finding ways to make banking easier for their customers through creating digital wallets, P2P payment apps, and more. But - if you’ve heard of “neobanks,” you probably know they’re shaking things up pretty dramatically. But what is a neobank, exactly?

Picture a bank that’s completely online, no physical branches. Everything you need is managed on an app or website. Sounds futuristic, right? Neobanks are all about using technology to make banking easier, faster, and more accessible.

Current Neobanks:

• Chime
• Revolut
• N26

Neobanking is more than just a fluke or a fad. They're expected to have huge growth this year, with the neobank transaction market set to rise to $7.36 Billion, according to Statista.

The big question is whether these digital banks can fully replace traditional banking, especially for people who still want some kind of physical connection to their money, or if that is still important in an era of mostly cashless transactions. This is where self-service kiosks come into play. These kiosks act as the middle ground, giving customers access to some hands-on financial services without the need for a full branch.

What Is Fintech, and How Are Neobanks Part of It?

To really get what neobanks are about, it helps to know what is fintech. Short for “financial technology,” fintech means using modern tech to make financial services better. Think mobile payment apps, investing platforms, or robo-advisors that help you plan your finances.

Neobanks are a prime example of fintech in action, and at their prime. They use app integrations, automation, and smart tools to give you a banking experience that’s far more nimble than what most traditional banks offer.

Why People Love Neobanks

Neobanks have become super popular, and it’s easy to see why. They have some major selling points that make them stand out from traditional banks.

• Convenience: Everything with a neobank happens online. Need to transfer money, check your balance, or even open a new account? You can do all that right from your smartphone. This kind of banking is a lifesaver for people in rural areas or places where traditional banks aren’t exactly around the corner.
  
  
• Lower Fees and Better Deals: Since neobanks don’t have to worry about things like maintaining buildings or branches, they save tons of money. The good news is they pass those savings on to us. Lower fees, higher savings interest rates, and even perks like free international payments are common with neobanks.
  
  
• Tech-Savvy Banking: Neobanks are all about integrating the best banking tools to customers. AI tools to track spending, real-time notifications for your transactions, and even crypto wallet support are just a few examples.

But while neobanks are proof of how much fintech can innovate, no system is perfect. Some people still feel they're missing something without physical access or human interaction, especially when dealing with complicated banking needs.

Where Neobanks Fall Short

For all the cool things neobanks do, they aren’t perfect. Traditional banking still holds the edge in a few major areas of banking, for professionals and for customers.

• No Physical Presence: Not everyone is comfortable with a purely online bank. If you're dealing with a complicated issue or large amounts of money, sometimes it feels better to talk to someone in person, especially if you’re having issues interacting with your bank online.
  
  This may sound like we're talking about older customers, but no. In a recent study, it was found that gen Z and millennials still use physical bank branches because of poor digital experiences. Here are some other reasons why traditional banking is still necessary.
  
  
• Customer Service Challenges: Sure, chatbots and email support save time, but they can’t really replicate the reliability of speaking to a human being. Getting help with urgent or unique financial issues can sometimes take longer with a neobank.
  
  
• Customer Trust: Even though most neobanks are backed by solid financial players, some people still worry about putting their money into a “faceless” digital system. Concerns about online security and fraud add to the hesitation.
  
  
• Dependence on Partnerships: Neobanks rely on partnerships with other companies to issue cards, payments, checks, and more because of their physical absence. They can’t do much, if anything, in-house. This is a riskier bank strategy purely because of cost, but also because relying on off of other companies’ stability.
  
  
• Limited Full-Service Options: While most of us love their no-frills approach, neobanks sometimes lack the wider variety of services traditional banks offer, like mortgages, business loans, certain types of savings accounts, or even on demand cashier’s check or card printing.

Integrating Better Tech in Physical Branches

While the fight between physical branches and fintech might continue to rage on, it doesn’t necessarily need to. Integrating more tech-savvy self-service options into physical bank branches can help traditional banks bridge the gap. But how?

Through self-service machines that focus more on what customers need from a physical bank branch visit. These smart machines can fill in the gaps in the neobank model by combining digital convenience with physical presence. Here’s why they’re a great match for neobanks.

• More Convenience: Imagine walking into a mall, transportation hub, or busy urban area and finding a sleek self-service kiosk. Like an ATM, you could print or scan checks, print a card, or even open an account right there. These kiosks bring a real-world connection to what’s otherwise an entirely digital experience.
  
  
• Better Customer Support: Some kiosks come with video chat features, letting you connect directly to a customer service rep if you need extra help. It’s not quite the same as a branch visit, but it’s a big step up from just chatting with a bot.
  
  
• Simplifying Complex Transactions: Ever needed to verify your ID or submit additional documents to your bank? Doing this digitally can be tricky when extra layers of security are in play. Self-service kiosks make it easier and faster to handle these tasks without needing to physically send anything somewhere far away.
  
  
• Building Trust Through Visibility: Branded kiosks in a branch or self-service areas show customers that traditional banks are serious about convenience, too. Seeing and interacting with something concrete makes people feel more confident about their financial institution.
  
  
• Making Banking More Inclusive: Not everyone is completely comfortable with online banking. Self-service kiosks, with straightforward touchscreens and even multilingual support, can help bridge the gap for people who might not feel ready to go fully digital just yet.
  
  
  

What’s Next for Neobanks and Fintech?

The combination of neobanks and self-service kiosks is a great example of how fintech can be flexible. While neobanks alone won’t completely replace traditional banks any time soon, adding kiosks into the mix makes them way more versatile. You still get the speed and ease of a digital-only model, but with an optional physical touchpoint for those times when you need it.

It’s a win-win, really. Self-service kiosks can fix some of the main complaints people have about neobanks, all while keeping costs down and staying true to the neobank vision of simple, tech-forward banking.

The Bottom Line

Neobanks have already changed how many of us think about managing our money. But, it doesn't mean traditional banking has to go away. With the addition of more up-to-date self-service machines and kiosks, neobanks and traditional banks can exist on the same plain. 

This partnership between digital convenience and physical accessibility has the potential to redefine banking as we know it. Whether you’re already on the neobank bandwagon or just curious about the benefits, one thing’s clear: banking is only getting smarter, faster, and more tailored to what we need.