What are the advantages of neobanks compared to traditional banking?
From promising zero commissions, carrying out all procedures through an application, 24-hour availability and even in some cases allowing you to buy cryptocurriences…These are some of the advantages of neobanks. In this article we analyze some of the main ones and explain what are neobanks?
As with all of our articles, to maintain rigor and clarity, let’s first explore what neobanks really are. For that, we resorted to the presentation of Ricargo Aguilar, in Xataka, which seemed very clear to us “neobanks are 100% digital entities that offer financial services. They operate online and absolutely all the procedures are carried out or from the mobile application or from their website. In general, they usually offer a bank account and a card, with various possibilities depending on the modalities we choose (free and paid).According to a study by The State of European Fintech, already in 2019 neobanks obtained investments for more than 2,400 million euros”.
Now having established what neobanks are, why are they so advantageous?
-Due to offering products through digital platforms, no personal procedures or paper contracts are necessary, so, in theory, its functionality is better.
-Traditional banks use various channels, usually their physical branches and digital banking. In neobanks, all procedures are through an application.
-The branches, logically, close, while a neobank is available all the time, 365 days a year, for 24 hours a day. In that sense, they are like operating like a traditional bank exclusively through the internet.
-The new generations, more cognizant of technology, are more likely to dedicate themselves to opening an account in a neobank than in a traditional one, so they contribute to financial inclusion.
-Most allow you to withdraw money at ATMs around the world without commission (although there is a limit).
-ome allow buying and selling cryptocurrencies.
-Interest rates are usually higher since their costs are lower than in a traditional bank.