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The Indian financial sector is rapidly evolving. Today, products and services are being built on disruptive technologies to increase user-friendliness. Neobanks in India are a by-product of the ongoing evolution.
Needless to say, a lot of payment service providers (PSPs) are coming forward with their own banking as a service product(s) to help launch these neobanks faster to the market.
For instance, Cashfree Accounts enables merchants to open and link accounts, and do many more banking activities than before.
Quite a buzzword in the financial market, neobanking in India is overhauling the Fintech sector. In fact, it’s offering new-age banking solutions to the end customers, especially the tech-savvy generation and the underbanked population of the country.
This blog dives deep into the basics of neobanking, how they’re different from challenger banks, and some of the top neobanks in India.
Let’s get started!
What Is Neobanking In India?
Neobanking is a contemporary banking technique that’s revolutionising both the financial and Fintech sectors.
Neobanks are digital-only banks in India with no physical branches, offering many sought-after services compared to challenger and traditional banks.
They leverage technologies such as artificial intelligence and machine learning to offer personalised and customised financial services to end-users and minimise the overall operating cost. Besides these, neobanks have many more benefits.
Benefits of Neobanks
Neobanks have brought about a paradigm shift in the ways people bank today. But, there still arise many questions as to why one may switch to neobanks when they’ve been banking the traditional way for years.
The USP of neobanks in India lies in their exclusive value proposition. Listed below are some neobanking pros that make them better than their counterparts.
- Highly convenient and user-friendly banking services
- Built for a niche audience
- Cost-effective alternative to challenger and traditional banks
- Offers digital banking services, such as, savings accounts, prepaid cards, bill payments, and money transfers
- Provide financial management services
- 24×7 customer support
- High-security features
- Simple and user-friendly mobile app interface
- Transparent structure with real-time notification feature
Neobanks In India vs Challenger Banks
Many people across the globe confuse neobanks with challenger banks. They may be operating on more or less the same principles but share a fine line of difference. Here’s a table to help you distinguish between the two.
|Regulations||Regulated by banks||Not regulated by banks.They follow RBI and govt. regulations|
|Business Model||All-inclusive financial institutions with elements of both traditional and neobanks||Similar to tech startups yet more technologically driven.|
|Ideal for||All-sized businesses||Usually serves small-to-medium sized businesses|
|Fee||Comparatively higher charges. However, lower than traditional banks||Cheapest services compared to challenger and traditional banks|
|Legal remedies||Defined legal remedies in case of a negative situation||No defined legal remedies in case of a negative situation|
|Longevity and relationship building||Better visibility and acceptance in the Indian market||Comparatively lower visibility and acceptance in the Indian market|
Growth Of Neobanks In India
The penetration of smartphones, especially in India, has reached 60.63% in 2021 compared to 46.44% in 2019 (CAGR 14.26%) oddly due to the outbreak of the COVID-19 pandemic.
This increase in usage of smartphones across the nation has significantly helped Fintechs and other similar institutions to bring about the much-needed change quicker than anticipated.
The outbreak of the COVID-19 pandemic also boosted the growth of neobanks in India. People belonging to all ages and groups are educating themselves and their peers to become tech-savvy and grab a hold on their finances using the services rendered by neobanks.
At present, neobanks in India ideally target three main segments of customers:
- The high-end consumers who’re always looking for better and seamless banking experiences.
- The underbanked customers who do not have access to quality banking services and have unstable flow of income.
- The working class who’re looking for smarter ways to manage and grow their finances and become financially independent.
Today, multiple neobanks operating in India are targeting each of these segments. They’re offering numerous banking and financial management services and ensuring that the target audience gets what they need at the click of a button.
Micro, small and medium-sized enterprises (MSMEs) is another segment that’s finding its dependencies on neobanks. The reason being, they have the least access to basic financial services offered by traditional and challengers banks. MSMEs account for nearly 95% of the country’s economic segment.
Neobanks are giving MSMEs the much-needed access to financial services through new-age banking systems, faster services, and secure networks. They’re helping them get strong credit lines and expand their business horizons without much worry. Many neobanks are also offering dedicated services to women entrepreneurs to help them grow and become financially strong.
Looking at the current penetration of neobanks in India, we can say that these digital-only banks are here to stay, get bigger and better with improvements in the field of financial technology.
Top 16 Neobanks In India: How They’re Disrupting The Fintechs
Neobanking is comparatively a newer banking concept. Yet, as stated above, it’s gaining a lot of traction among both individuals and businesses in India.
Listed below are some of the top neobanks in India offering an exclusive range of financial services to both individuals and businesses.
Jupiter is a highly renowned and recognized neobank in India. It aims to provide paperless and seamless banking services to its customers across the nation. The app’s prowess is impeccable.
- Makes banking simple and fun
- track and manage finances easily
- Get necessary financial guidance and spend judicially
- Opens a savings account in about 3 minutes
- Instant, 24×7 customer support service
- No hidden fees, no unexpected charges
- 100% digital, completely transparent banking experience
Besides these, Jupiter also offers an exclusive Jupiter debit card to its customers. With the card, you get the following benefits.
- 1% reward on all purchases
- Secure card controls like sleep and freeze
- Zero annual charges
- Discounts on various sites
The list is exhaustive. Visit the site or download the app to discover the true essence of this neobank and its services.
InstantPay is reportedly the country’s largest neobanking platform. It offers a full stack of financial services to individuals and businesses of all types and sizes. As per statistics, the neobank processes more than a million transactions per day.
It’s mostly known for its inclusive banking solutions such as,
- Instant account activation
- Real-time money tracking
- Cash deposit
- 27x7x365 customer support service
Customers can access InstantPay through the web or download its mobile app. Both the platforms are highly intuitive and easy to use.
Businesses can integrate InstantPay’s API with their accounting systems and easily conduct financial activities. The API enables businesses to auto-scale from zero to million transactions in a day.
InstantPay has partnered with many renowned Indian banks such as ICICI Bank, Axis Bank, IndusInd Bank, and Yes Bank to offer seamless financial services to its customers.
- Individuals can avail InstantPay digital account services like,
- No minimum balance requirement
- Cash withdrawal services
- Set spending limits and manage finances
- Make online and in-store payments
- Make meaningful investments
- Small-medium businesses can open bank accounts and leverage many services, such as,
- Personalised accounts with debit cards and cheque books
- Receive and send money to vendors, individuals, and other businesses
- Onboard and manage customers, vendors, and employees using an in-built CRM system
- Apply for business loans
- Manage business expenses and make investments
InstantPay also offers the InstantPay Digi Kendra service that enables you to do basic banking activities, get insurance, and make travel bookings, and much more, on the go.
Payzollo is another neobank that’s thriving in Indian market. It’s a digital-only platform made especially for the millennials.
It aims to build a new way of banking where people can discuss, propose, and understand financial nitty-gritties. In other words, it acts as an intelligence hub where people/businesses can get enlightened or give advices and help one other grow.
The neobank offers the following benefits:
- Open a savings account in about 3 minutes
- Convenient banking with high-level security features
- Virtual card to make online payments (wherever Rupay is accepted)
- Unicard that can switch between debit, credit, and Forex cards.
- International card for making online purchases on foreign lands
- Set category spending limits to ensure judicious spendings
In addition to these, Payzollo provides a comprehensive expense management feature to track expenditures and investments, and effectively enable saving.
Payzollo uses artificial intelligence and APIs to provide the best and most convenient on-the-go banking experience.
Freo is a one-of-its-kind neobank in India that’s specially designed to meet the banking needs of the millennials. It aims to provide simple, intuitive, fully-digital banking services to its customers to help them manage their finances via their smartphones with utmost ease and comfort.
Among many of its services, Freo enables customers to build credit health while managing expenses and saving for the future. Customers also get access to financial products like,
- Lifetime credit line (of up to INR 5,00,000, as of date)
- Credit cards
- EMI options
- Deposits & savings
- Buy-now-pay-later option
The neobank is coming up with many more digital banking solutions to help individuals manage their finances on the go and never face cash crunch.
As the neobank’s site claims, Chqbook is “India’s first neobank for small business owners.” It offers a wide range of exclusive and personalised financial services to small-scale Indian businesses through its five pillars – banking, khata, lending, insurance, and rewards.
It aims to empower the underserved segment of society and offer financial assistance and security. As of date, Chqbook has approximately 8 lakh customers from across the country. The neobank provides the following services:
- Current account with rewards on daily transactions
- Customised insurance coverages
- Easy access to loans with zero fee
- Digital ledger services to track and maintain transaction records
Chqbook’s platform is powered by artificial intelligence and data analytics that enables small businesses to enjoy better control over their finances and expand operations beyond imagination.
Neo-bank by Atlantis aims to enable customers and small and medium-sized enterprises (SMEs) to spend, save, invest, and control their finances effectively and efficiently.
Reimagine finances with Neo-bank.
- Get a holistic view of finances
- Intuitive and easy-to-use dashboard
- No hidden fees and charges on financial transactions
The neobanking app enables customers to open accounts that does more than usual.
- Make informed financial decisions
- Transact easily and track expenditures
- Make saving goals and achieve them
The app also rewards users on every purchase they make – be it on an eCommerce, fitness, or a personal care site.
The USP of the neobank lies in the technology it uses to craft financial services. Each of its solutions aptly aligns with the best interests of its consumers. The institution aims to help millennials achieve financial freedom and make banking a fun activity than a tedious job.
Unlike the above talked about neobanks, Fi Money is more inclined towards serving the working professionals of the nation.
The neobank offers a smart, zero-balance savings account loaded with many innovative features that helps professionals manage their money in a better and more refined manner.
- In-app assistance helps you seek answers to questions like “where did I spend my money?”, “how can I save more?, etc.
- Set payment reminders, easily cancel subscriptions, and manage many more activities.
- Offers Fi cards (powered by Visa) to make payments.
- Up to INR 5 lacs insured money
- No minimum balance
- Zero markups on forex
- Withdraw money from any ATM
- Transparency in fees
- Create rules using Fi auto-bot. For instance, automate actions like save, pay, or remind about a payment/subscription with a single tap. Easily modify rules when needed.
- Make flexible, smart deposits to grow savings using Fi jars. Also get rewarded for every penny saved.
Fi brings in fresh banking solutions that are engaging, encouraging, and excellent for its target audience. The neobank offers many traditional banking activities as well. Log on to its website or download the app to know more.
Established in 2015, Niyo has made quite a mark in the neobanking sector through its impeccable range of digital-only banking solutions. It’s also one of the best neobanks in India. It has not only simplified and enriched the experience of users but also given them a perspective into the new-age of banking.
Niyo’s suite of modern banking products are as follows:
- NiyoX: Savings account with wealth management features
- Up to 7% interest p.a on savings
- Directly invest into mutual funds
- Earn interest on the fixed deposits
- Niyo Global: Go global hassle-free
- 0% markup on Forex across the globe
- Spend INR in more than 150+ currencies, without any extra charges
- 24×7 in-app chat customer support
- Up to 5% interest on savings
- Niyo Money: In-built Robo-advisory for wealth management
- Invest in mutual funds with zero commission
- Import, track and act on mutual fund portfolio
- Use goal-based advisory services to achieve financial goals
- Invest in stocks & ETFs both in the domestic or global market
- Niyo Bharat: Open-banking platform for businesses and salary cards for employees.
- Lifetime zero balance prepaid cards
- Multilingual app that supports over 10 languages
- Payroll, HRMS, and quick and easy salary transfers for employers
Inaugurated in 2019, Finin is a consumer-focussed neobank. It’s an amalgamation of various wealth management concepts built over a Fintech landscape to provide holistic banking solutions to the end-users.
- Hyper-personalised incentives and rewards
- Competitive and attractive interest rates
- 24×7 customer support
- Sensible account and wealth management
The neobank aims to help individuals exercise complete control over their money.
- Open an account in about 2 minutes
- View all existing accounts in one place
- Get AI-driven insights on savings and expenditures
- Save more with automated notifications and reminders
Finin ensures a transparent, delightful, and hassle-free banking experience through its highly intuitive mobile app.
FamPay is India’s first neobank especially designed and developed to meet the financial needs of teenagers. It allows teens to have their own accounts and freedom to spend money, albeit under the supervision of their parents. FamPay offers a numberless, secure card that’s co-branded with IDFC First Bank.
FamPay enables teens to make simple payments across various platforms such as eCommerce, OTT platforms, food apps, etc.
The neobank aims to empower teens to become financially independent and responsible human beings from a very young age. It gives them the opportunity to make decisions, save money, and manage their spendings. At present, the neobanking app has more than 2 million teenage users.
Contrary to the above-listed neobanks, North Loop serves the global Indian population. The financial service platform offers banking and investment facilities to people living away from home.
With North Loop, one can easily set up a bank account in a new country within 5 minutes.
- Track expenses and savings
- No account or ATM fees
- No minimum balance requirement
- Access credit and loans
- Earn up to 8x points
- Enjoy transparency and fairness while global banking
Customers can also leverage global investing through North Loop’s highly intuitive and easy-to-use mobile app. Invest in US stocks, ETFs, mutual funds, fixed deposits, and cryptocurrencies. The app also offers personalised, goal-based plans to help individuals save and financially secure their future.
North Loop offers three exclusive financial plans to choose from according to one’s financial needs and requirements. Check its official website to know about the plans in-depth.
Fold is an upcoming, invite-only neobank in India that’s set to release in 2021. However, speculations revolve around the news.
Irrespective, Fold is a digital-only bank, that aims to deliver top-notch banking services to its customers. It claims to walk beside a customer’s existing digital habits and enhance their banking experience beyond imagination.
- Exercise control over finances
- Set daily, weekly, and monthly budgets to avoid overspending
- Measure and manage expenses
- Set saving goals and reach targets
- Make informed investments, starting as low as INR 100
Fold also offers VISA-powered debit cards to its customers.
- Enjoy instant cashback on every transaction
- No maintenance or other hidden charges
- If lost, deactivate the card through the Fold app
- Set spending limits and get notified if exceeded
There’s more to Fold than this. Visit the site to get your Fold invite token!
Tide is a UK-based neobanking platform that’s planning to establish its roots in India in 2022. The neobank will primarily focus on serving small and medium-sized enterprises.
As of date, Tide is backed by an INR 1,000 crore investment and will start offering services in the first half of next year. It has partnered with RBL bank and plans to serve about 5.6 million Indian SMEs, especially in the unrecognised and unregistered sectors of the economy.
In the UK, Tide has over 350,000 SME members and enjoys 5.5% of the total market share.
As the name suggests, Mahila Money is a digital-only neobank especially set up to help aspiring women entrepreneurs become financially secure.
Through the app, customers can,
- Share experiences and get financial advice from experts and peers
- Learn to be financially independent
- Be part of a women-only community
- Open a bank account online within a matter of minutes
- Get instant loan
- Find the right financial protection plans
- Set goals and start saving for them
At present, more than 20,000 women have subscribed to Mahila Money’s financial services. Nearly 1.5 lakh women are discussing their financial experiences, needs, and challenges through the neobank’s community channels.
Mool is an innovative neobank that’s majorly focused on solving the deeper design and distribution challenges and helping individuals make the most of economic opportunities.
From opening a bank account while sitting at home to managing finances on the go, the neobank offers an entire suite of bundled financial services to address age-old banking problems.
- Open bank account with no minimum balance
- Leverage auto-pilot service on savings and investments
- Use personalized insights to make smart financial decisions
- Facilitate instant payments
- Use virtual cards for making purchases
- Build a healthy credit score
Mool has partnered with RBI-licensed banks, many SEBI-authorized AMCs, and IRDA-licensed insurers to offer authentic financial services.
Deriving the essence of this neobank from its name, OCareNeo is India’s first digital health and banking platform. The neobank was developed to bring healthcare and banking services all on one single platform. Its primary objective is to help people keep a check on their health while strategically growing their wealth.
OCareNeo has incorporated the features of a digital bank, a healthcare institution, and an insurance service provider into one single bag to help people live a healthy life.
Here are some of the services they offer:
- Get access to health history, e-insurance details, and medical reports instantly
- Create saving pools and stay prepared to deal with medical emergencies
- Use OCareNeo card, connect it to your OCareNeo bank account and pay medical bills instantly
- Keep track of your physical and mental wellbeing, sleep patterns, and daily nutrition with OCareNeo’s Health Score
- Stay updated about the next health check-up
Similar to Fold, OCareNeo is also an invite-only bank. Visit the website and get your exclusive access.
Neobanking in India is introducing a new wave of banking. It’s not only helping individuals and businesses leverage smart banking activities but manage finances and even grow their money with time. The use of new-age technology and the ideology to offer customized and personalized financial services is another reason behind massive growth of neobanks in India.
While traditional and challenger banks are trying their level best to get into the race, neobanks have already crossed the half-way mark. Their technical systems’ simplicity and modernity along with their low or no-cost banking services, greater savings rates, and tailored financial solutions, are helping them excel. We won’t be surprised if neobanks take the title of industry leaders in the coming years.