Page 21 - Banking Finance October 2025

ARTICLE

The Neo-Banking

Revolution: How

Fintech Innovations

are Redefining the

Traditional Banking Chief Manager - Faculty
Praveen Kumar S V

Staff Training Centre
Landscape Union Bank of India
Hyderabad

Neo-banks are digital-only banking institutions that provide a wide range of financial services, from
basic checking and savings accounts to loans and investment products, entirely online or through
mobile apps. They typically operate without physical branches, relying on technology to deliver a
seamless and personalized customer experience.

Introduction direct deposit, Chime has gained popularity among
younger consumers by offering a user-friendly mobile
The banking sector is on the cusp of a significant transfor-
mation, driven by the rise of neo-banks. These digital-only app and a focus on financial wellness features.
banking institutions are leveraging cutting-edge fintech in- N26 (Europe): A leading European neo-bank, N26 pro-
novations to disrupt the traditional banking model, offering vides real-time spending updates, instant transfers, and
customers a more streamlined, user-friendly, and cost-effec- a range of personalized features, attracting a tech-savvy
tive experience. This article delves into the world of neo- customer base.
banks, analyzing their impact on traditional banking, the key Paytm (India): A dominant player in the Indian digital
drivers of their success, and the strategies incumbent banks payments market, Paytm has evolved into a compre-
can employ to navigate this new era. hensive digital banking platform, offering a wide range
of services including payments, savings, investments,
What are Neo-Banks? and insurance.
Neo-banks are digital-only banking institutions that provide Revolut (Global): A global fintech company that offers
a wide range of financial services, from basic checking and a range of financial services, including currency ex-
savings accounts to loans and investment products, entirely change, international transfers, and investment prod-
online or through mobile apps. They typically operate with- ucts, through its mobile app.
out physical branches, relying on technology to deliver a
seamless and personalized customer experience. The Rise of Neo-Banks
Neo-banks, also known as challenger banks or digital
Examples of Neo-Banks: banks, have witnessed exponential growth over the past
Chime (USA): Known for its fee-free overdrafts and early decade. According to various studies and reports from repu-

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