It is no more a secret that the incumbents in the Banking & Financial Services industry are facing increasing competition from a plethora of aspects of the digital world- specifically from the thriving Neobanks. Neobanks are expanding rapidly by leveraging cutting edge technology that includes Robotics, Artificial Intelligence and Machine Learning to create seamless customer experiences. And in sync, many traditional players continue to battle this threat while struggling to keep up with their deep-rooted resistance towards change, and more so digital transformation.

Neobanks broke into the Financial Market in the recent past in response to the rising demand for nimble and hassle-free digital services. Their appeal lies in their power to challenge traditional players’ crumbling business model, with highly attractive low and transparent fees, while offering unparalleled and personalized customer experience.

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To start with, traditional banks must consciously take baby steps towards adopting from the below distinct digital strategies, while entirely leveraging their existing strengths and customer relationships.

1.  Convenience :- The entirely digital model of Neobanks has translated itself into top-notch convenience for customers. This digital set-up facilitates faster time-to-action, all from the comfort of mobile devices. For instance, an entirely online onboarding process that reduces non-digital touchpoints increases the likelihood of adopting your services, thus boosting customer acquisition rates. Also, a 24×7 access to virtual customer support has paved the path for faster resolution with fewer efforts from the customers.

2. Low Costs and Fees :- Neobanking also enjoys a cost-effective approach in comparison to traditional incumbents. Unlike their traditional counterparts, they are spared the hassles of brick-and-mortar branches, legacy infrastructure, and credit risks, making way for little to no fees at all.

3. Customer Orientation :- With convenience at its core, Neobanks emphasize on the look and feel of their platforms. The intuitive and highly engaging systems are not only crisp and user-friendly but are also heavily iterated to cater to complex and evolving customer needs.

4. Smart Reporting :- The reliance on new-age technology and focus on rapid iterations has made Neobanks offer advanced and smart reporting. Not only does this consistently provide updated details against the account, but it also takes a leap to provide a sophisticated and hyper personalized financial advisory that help customers make more insight-driven financial decisions and investments, in sync with their budget and saving goals.

5. International Payments :- International Payments in traditional banks have always come with a fair share of obstacles in terms of its high fees and cumbersome processes. Neobanks have adopted a universal transfer rate for all its payments and upgrades, keeping the process hassle free and adaptive.

6. Advanced Security :- Neobanks implement biometric verification, 2FA (2-factor authorization), RBAC (Role-Based Access Control), high class encryption technology in light of protecting customers and creating an affinity towards digital banking.

7. Faster Product Launches :- Digital-only players like Neobanks rely on partnerships and third-party collaborations to bring forth innovative customer solutions, as quickly as possible. This transforms into a risk-tolerant digital ecosystem that not only helps save time and money, but also augments flexibility of response to evolving customer demands.

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All in all, while traditional banks are trying to play catch up with Neobanks in terms of digital capabilities and customer centricity, the game is still on and there is a ton of scope to fight back. The bottom line continues to suggest an investment towards Neo-fication of traditional banking. So, a customer-obsessive approach amalgamated with a focus on extensive use of cutting-edge technology through the right partnerships, is hands down the first step towards turning the tides away from broken digital journeys and excessive paperwork.