Fintech (financial technology) has been transforming the way financial services are delivered and consumed for many years. But did you know that there are also fintech "banks"? These fintech firms, also known as neobanks, are attempting to transform the banking industry by making banking more convenient and accessible.
Is a neobank the right choice for you? Here's everything you need to know about neobanks, including their benefits and drawbacks, as well as a few well-known examples.
A neobank is typically a fintech company that provides financial services similar to those provided by a traditional bank. Checking accounts, savings accounts, credit cards, and other financial instruments may fall into this category.
Because they challenge the traditional banking industry, neobanks are sometimes referred to as "challenger banks." Traditional banks, such as HSBC and Citibank, can trace their roots back centuries in some cases. However, neobanks are frequently startup businesses that haven't been around for many years and don't have physical locations.
Rather, these digital banks prefer to provide only online services, typically via web browsers and mobile apps. Many traditional financial institutions, on the other hand, have a hybrid business model that includes both in-person and online services. This hybrid model may appear to be more advantageous at first glance because it can appeal to a wider range of people, but having in-person branches can also come with high overhead costs.
Many of the costs associated with in-person lenders, such as upkeep and maintenance, as well as hiring employees, are typically avoided by neobanks. Given this, the appeal of these new challenger banks is the promise of lower interest rates, lower fees, and greater convenience. Furthermore, emphasizing online services may help these digital banks connect with tech-savvy millennials and Gen-Zers.
Although you may not believe you are familiar with any neobanks, you may have heard of a few. Many of Vietnam's most popular neobanks, such as Timo, Tnex, and FinFan, have the potential to attract millions of customers. Surprisingly, none of these firms are more than five years old, demonstrating how successful and disruptive neobank can be in a short period of time.
Here are some of the top neobanks in Vietnam:
Timo was established in 2015. Timo is a digital bank of the next generation, sponsored by Vietnam Prosperity Bank (VPBank). Timo has all the amenities of a bank, including ATM cards, payment and savings accounts... Timo is distinguished by its innovative experience: no branches, no traditional transaction offices; Internet and mobile banking applications are optimized with the most advanced design to provide users with maximum convenience and unique features.
When creating three lines of Spend Account, Goal Save, and Term Deposit cards, Timo's new generation digital bank's convenience and unique features were maximized. You have more freedom to optimize your time and money with Timo. You will also benefit from the privileges that Timo provides to Pioneer Members in order to experience a new banking style with over 15,700 free ATMs.
Timo Digital Bank Benefits
Tnex was founded in 2020 and offers multiple financial multi-services. Tnex is sponsored by Vietnam Maritime Bank (MSB), it will provide you with extremely impressive experiences with TNEX App and TNEX Merchant App.
This company’s flagship product, called the Tnex Payment Accounts & Energy Accounts, is a combination of two different accounts that form one cash management product. However, it’s possible to open a Tnex Payment Account, which is similar to a banking account, without opening a banking account, which is similar to a banking account.
"FinFan is a B2B model as a One – Stop – Shop with fully loaded platform as the art of borderless money movement as sending, receiving, spending, lending, exchanging, … It’s integrated multi channels, multi corridors that crosses including mobile, web and branches, POS, ATM, Kiosk, ... and Cards that making it easier to build a strong partner ecosystem of banks, billers, aggregators, agents, merchants, payment networks, etc… and can be brought on board in weeks instead of years for partners expanding quickly to unreached markets."
Is it worth considering opening an account with a neobank? Here are some neobank advantages that may influence your decision:
Neobanks are not for everyone. Here are a few disadvantages to be aware of:
Neobanks are legitimate fintech companies that typically offer services similar to those offered by traditional banks, such as checking and savings accounts. However, despite its name, a neobank is not typically a bank. In general, neobanks work with partner banks to provide these services and protect customers, such as FDIC insurance on certain accounts.
The best neobank is one that offers financial services that are in line with your objectives and lifestyle. With so many popular neobanks to choose from, such as Current, Aspiration, and Varo, you should have no trouble finding one that fits your financial situation.
When comparing neobanks, consider the various services they provide and any unique advantages they may have. For example, you may prefer faster direct deposit times, which one neobank may offer but another does not.
The best neobank is one that offers financial services that are in line with your objectives and lifestyle. With so many popular neobanks to choose from, such as Current, Aspiration, and Varo, you should have no trouble finding one that fits your financial situation.
When comparing neobanks, consider the various services they provide and any unique advantages they may have. For example, you may prefer faster direct deposit times, which one neobank may offer but another doesn’t.
As time passes, top neobanks platforms will begin to conduct a complete overhaul of the global financial and monetary ecosystem. This is easily judged by the fact that their current growth rate in the global market is expected to reach 50.6 percent by 2020.
Neobanks will gradually and steadily become the preferred option for both B2C and B2B operations, personalizing them for user-friendliness. It would be prudent for mainstream banks to accept themselves in such an environment. Choosing whether to work with digital banks or create a full-fledged technical project.
And what are the prospects for neobanks in Vietnam? Mainstream banks are also preparing to take technicalization and infrastructure changes. As a result, adapting to this new banking solution will be an unavoidable trend in the future. As for neobanks such as FinFan, they are gearing up to gain traction.