Currently, neobanks (digital banks, online banks) are becoming a crucial component of the financial infrastructure. The share of neobanks is constantly growing. Analysts believe that the future belongs to them, and according to forecasts, the number of financial organizations of this format will increase by 53.4% annually until 2030.

A neobank is a financial organization that operates only in the online space. It communicates with clients and provides services without physical branches, through mobile applications. This is one of the differences between a neobank and a traditional banking service. What else distinguishes a digital bank?

License

The activity of any financial institution requires obtaining a license. A classic bank needs a banking license, while a neobank needs an Electronic Money Institution (EMI) license. The activities of digital banks are usually regulated by the same government agency in the country of registration as traditional banks. The EMI license limits the use of third-party funds but allows for payments to be made. In addition, neobanks are required to undergo an annual audit. Thus, the presence of an EMI license is a guarantee of the reliability and security of a financial institution of a new format.

Services

The main task of neobanks is to ensure fast and reliable transactions, including cross-border ones. Digital financial institutions offer favorable conditions for currency conversion. Neobanks can provide access not only to cards and accounts but also to cryptocurrencies.

Many neobanks offer non-standard solutions to clients that are not available in traditional banking institutions: mobile applications for trading stocks, options, cryptocurrencies, and other assets; transfers in instant messengers; and the absence of solvency checks.

By reducing operational costs, neobanks can provide services with lower commissions compared to traditional banks.

Account Opening

The process of opening an account in neobanks is simpler and more efficient. It does not require personal presence, and all necessary documents can be provided online. In digital banks, less attention is paid to residency in a particular country, and cross-border accounts are popular.

If you have questions about opening an account in a neobank for your business, ask the specialists at IT-OFFSHORE.