The financial landscape of India is entirely different from other economies, this is one of the major reasons for the embracement of technologies. All the hurdles during the advancement are completely different which includes distinctive customer behavior, the scale of the market, regulatory challenges, etc. Due to the coronavirus pandemic outbreak, it is one of the best things that happened for fast-tracking the advancement in the digital banking process.
Many applications like AntPay are helping in increasing digitalization by introducing digital transactions in India which are being increased by 30%. According to various reports, the investments in India were around $3.5 billion in the year 2019. Even with the pandemic situation, it has increased $2.7 billion more in the year 2020. According to the governor of RBI, neo banking is also being referred to as the emergence of digital banks in India.
Neo banking is considered as the digital future of the entire banking ecosystem which will be the best in the world.
Neo Banks – The Future Digital Banking:
Neo banks are the advanced digital banking system that will operate completely digitally without any traditional branch or network. Currently, it is in the initiation stage but it is growing at a rapid pace and also paving the future of banking infrastructure. According to the governor of RBI, this segment of the banking system will be the major advantage in offering the best services directly to the customers or through any collaboration of banks and associates.
None of the neo banks are directly licensed RBI banks but they can use the bank partner license for their services by collaborating with other banks. Neo banks are having two different categories one will be directly offering the services. Applications like AntPay, RazorpayX, etc will be offered service to the customers as a service provider. In a second way, various online entities are being introduced by the banks that will be used for providing services to the consumers.
Offerings of Neo Banks:
Get the completely digital technology which is having major functionalities with the integration of artificial intelligence, open APIs, cloud-based storage, machine learning, etc. Banking as a service is completely a data-driven approach to have customized product decisions with proper customer experience using the open APIs. It is also using cyber security for the protection against all kinds of cybercrime to ensure the safety and security of the consumers.
Banking as a Service (BaaS):
It is end-to-end encryption that will allow every kind of digital bank and all the third-party providers to get connected with an open application programming interface with the banking systems. This will help in ensuring the most secure banking solutions to the customers as it will allow seamless communication between two applications. Using the APIs the entire banking services will have the mainline banks to get diverse stakeholders which are including fintech companies. The stakeholders are also including web developers and other non-financial businesses who can also have the proper banking services with online offerings.