How are Traditional and NEO Banks Different from Each Other?

As we know, banking has been a very old industry running for several years. Banks have established a market and gained trust of their customers by their offered services. Nowadays new and modern banks are evolving in the market known as Neo banks which are working totally online providing the same services as traditional banking. In this article, let's learn what traditional and Neo banking and how are they different from each other.

What is traditional banking

Traditional banking are the old forms of banks present with a physical branch and domestic banking licence. Traditional banks are most common banks present with a large market such as State bank of India, Canara bank, indian overseas bank, etc.

Features of a traditional bank-

• Physical Branch;
• Regional headquarters
• ATMs
• Provides physical locker facility
• Account managers.

What is neo banking

Neobanks are modern banks without any physical branch present online unlike digital banks. They provide digital, mobile-first financial solutions for payments, money transfers, lending,etc

Features of Neo banks-

• It is a online bank with AI-powered technology
• It has no physical branch
• It works 24/7 no timing boundations
• It is very easy to access and Cost-effective.

Difference between Traditional banks and Neo banks

• Traditional banks are more popular as they are easily accessible and have better connectivity with customers whereas neo banks do not have physical presence and are new to the Indian market and customers.
• Traditional banks are in the market from several and has set up its roots strongly by offering various facilities such as locker facility, demat account, ATM etc. whereas Neo banks do not offer any such services to the customers.
• Traditional banks have banking licence and trust of customers because of their physical presence and RBI's regulations while neo banks are not regulated by RBI (Reserve bank of india).
• Traditional banks also provide digital banking facilities but are not as efficient as neo banks Whereas Neo banks have the app-based functions backed by the latest technology which provides as compared to traditional banks is better.
• Traditional banks are more convenient and popular because of its tech-savvy format.

Neo banks are the future of banking as they are expected to grow all over the world. They are having such a framework which assures that they would stay. The modern generation is tech-savvy and don't have time and Neobanks are efficient and time saving. Neo banks are good but can't replace traditional banking as it has its own unbeatable market.