Bahaa Abdul Hussein explains this concept with an elaborative approach. The first aspect is to understand neo banks as a concept.
There are many consumer and trade battles happening around us. Truly, the present decade is a war of attention and consumption – and the latest to join this wagon are the digital banks. Digital-first bank, as obvious by the name – are banks in the virtual space. They are also called neo banks. Although the market of neo banks was considered to be saturated, it is evident that these neo banks are here to stay.
Current state of neo banks
Neo banks are currently fighting for consumer attention. Although given the past events of last 3-4 years, a lot of consumers have shifted to digital-first banks, there is a lot of competition amidst the banks. With a high number of neo banks in the market, they have become highly competitive, and every feature offered by the neo banks becomes a game-changer.
The prime features that attract consumers are:
– Ease of account opening
– Security
– Money transfers
– Personal financial management
– Support
– Alerts
– Open Banking
The prime features are almost available at every neo bank, and most of them are comparing each other on the number of features offered. But, through surveys, it is found that there are three development areas wherein neo banks can focus upon.
The overlooked areas are:
– Junior accounts
– Wealth management
– e-Wallets
The above three areas hold the potential to attract more consumers to the neo banks. Currently, the services around these three areas are limited, allowing the banks with the opportunity to beat their competitor. Given the growth forecast of American digital banking market is $600 by 2028 as per Global Market Insights, neo banks should stay put and focus on these areas.
In order to thrive in this domain, they need to do their homework and firstly understand the traditional working structure. The above three areas are still dominant in the traditional banking sector – and neo banks have to identify the gap. Once they are able to crack down the code to providing efficient online services in these areas, they will automatically capture eyes.
E-wallet is the next big thing, as speculated by many, and neo banks have the chance to have the first swing at it. So far, all the technology and interface around it is quite fundamental. With some innovative changes, e-wallet can bring a positive outlook to neo banks. So, in the current battle of gathering consumer attention, neo banks need to focus on the areas that are overlooked by many – that is the key to their growth.
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