Neo Banks: A Paradigm Shift in Banking

Abstract

Purpose: In terms of market structure and competitiveness, Indian banking has seen major changes. The future of banking services is being revolutionised by technical and digital advancements. Technology advancements are anticipated to have a significant impact on the global financial sector in the near future. Innovations in payments, lending, asset management, and insurance put financial institutions' business models and strategies to the challenge, but they also offer opportunities to both newcomers and existing market players. Fintech is a term used to characterise emerging technological advancements in the financial services sector due to an increased reliance on information technology. The concept of new- generation banking is resonating with traditional banks' increased use of technology through in-house upgrades or partnerships with fintechs. This in turn is driving the banking sector toward new business models, innovative products, and services. Clients nowadays, particularly retail customers, want banks to offer them efficient, dependable, and customised services. Therefore, there is a need to offer financial services that are both affordable and accessible to everyone. Narrow banks. One such cutting-edge strategy used by fintech companies is neo banking. Neo banking is a financial industry buzzword that is revolutionising India's Fintech industry. Neo banks, which have been widely successful, are now expanding into India and giving users access to financial services with just a mouse click. Neo banks can offer banking services and products online through partnerships with traditional banks despite not having a physical presence. Neo banks provide cutting-edge banking options to their clients, particularly the tech-savvy generation and the underbanked citizens of our nation. Therefore, this research paper aims to introduce this concept of neo banking to a wider range of consumers and attempts to make a study on Neo bank in its present and future by analyzing its pros and cons through SWOC and ABCD Framework Analysis. Design/Methodology/Approach: Research gap is identified after a literature search on Neo banks. Since this concept is in its inception in India, there is a lot of scope for research. Secondary data is analysed to understand the concept of neo banks and SWOC and ABCD framework analysis is conducted on Neo banks. Findings/ Results: This research article explores the new paradigm shift in providing financial services to individuals and businesses. Since Neo banks are in its inception stage, this paper attempts to understand the advantages, challenges, and benefits of Neo banking through ABCD and SWOC analysis. In addition, the paper also focuses on 5 prominent neo banks in India and the growth and future for Neo banking in India. Type of Article: Review-based exploratory study.