{"id":9358,"date":"2021-08-04T19:03:41","date_gmt":"2021-08-04T13:33:41","guid":{"rendered":"https:\/\/open.money\/blog\/?p=9358"},"modified":"2023-07-05T13:11:59","modified_gmt":"2023-07-05T07:41:59","slug":"neobanks-101-everything-you-need-to-know-about-neobanks","status":"publish","type":"post","link":"https:\/\/open.money\/blog\/neobanks-101-everything-you-need-to-know-about-neobanks\/","title":{"rendered":"Neobanks 101: Everything you need to know about neobanks"},"content":{"rendered":"

Neobanks are topping the charts in terms of capital, value, and business growth both in India and globally. If we look at any smart bird in the FinTech industry, they\u2019ll recommend switching to neobanking, as it makes managing business finances a whole lot easier!<\/span>\u00a0<\/span><\/p>\n

While banking has been made simpler for customers over the years, the transition hasn\u2019t been to the digital space that has been limited to individual aspects of banking. And doesn\u2019t encompass the overall money movement & financial operations of a business.\u00a0<\/span><\/p>\n

Setting up a bank isn\u2019t an easy task at hand. Only a few dominant establishments are able to procure a banking license. As institutions need to clear all regulations & need to produce a minimum paid-up capital as notified by the regulatory authority. Like in India,<\/span> the minimum capital requirement is pegged at Rs. 500 crores<\/a>.\u00a0<\/span><\/p>\n

After the deregulation in the financial industry that led to the financial crisis in 2008, the banking regulators across the globe authorized new banking licenses and regulated the financial institutions. Europe was one of the first to regulate & introduce PSD2 (Payment Services Directive Two) legislation, further paving the way for neobanks to revolutionize business banking.\u00a0<\/span><\/p>\n

When did neobanks start operating in India?\u00a0<\/span><\/strong><\/h2>\n

Neobanks<\/a> have been around in India since 2013<\/span>, soon after RBL & YES banks made their APIs public to other developers for building cutting-edge financial services. And now, we have many neobanking players making heads turn in the country.\u00a0<\/span><\/p>\n

Fast forward to 2021, wherein neobanking platforms have raised<\/span> close to $173.5 million<\/span><\/a>.<\/span><\/p>\n

How do neobanks transform the way businesses function? <\/b><\/span><\/h2>\n

Neobanks are an indispensable part of everyday business banking as they help businesses scale up in the digital space by bridging the gap between accessibility and relevant tools in one place.\u00a0<\/span><\/p>\n

Neobanks exist in partnership with traditional banks and attract a wider range of audiences as they are built keeping the fast-changing aspects of running a business<\/a> in mind. Neobanks focus on <\/span>replacing disjointed banking by connecting banking & finances. <\/span>These digital-only banks provide services at lightning speed and charge very little.<\/span><\/p>\n

Ever since <\/span>the Indian government announced that a cashless economy was the way forward, it has benefitted the FinTech<\/a> industry massively. As t<\/span>he financial landscape has shifted with an increased focus on customer experience & customer success on the virtual platforms. And while traditional banks are still adapting to the new financial landscape, the processing costs and physical dependencies have been reduced for business with the help of neobanks. So unlike earlier, small businesses don\u2019t have to struggle to meet their banking needs from the traditional banks, as<\/span> these digital-only banks provide a connected banking experience to the users.\u00a0<\/span><\/p>\n

The best part?\u00a0<\/span><\/p>\n

Businesses can run other business and finance operations with the value-added services that neobanks have to offer. Like with a <\/span>platform like Open<\/span>, businesses can integrate a\u00a0 payment gateway<\/a> or use net banking, cards<\/a>, digital wallets\/ UPI<\/a> for making payments. Not to mention, overseeing accounting<\/a>, expense management<\/a>, payroll<\/a> and other aspects of business is easier.<\/span><\/p>\n

What makes neobanks the most obvious choice?<\/b><\/span><\/h2>\n

Neobanks entered the market with something different \u2014 a simple, user-friendly application that makes business banking more seamless.\u00a0<\/span><\/p>\n

Here\u2019s how!\u00a0<\/span><\/p>\n