Page 45 - Banking Finance October 2025

ARTICLE

primarily limited by regulations prohibiting the independent References:
operation of fully digital banks. They operate through bank Journal Articles
partnerships instead.
Abdulle, M. A., Kulmie, D. A., Awale, A. A., Ibrahim,
M. S., & Adan, A. T. (2025). Female University Students
Neobanks can boost financial inclusion by offering simplified and Fintech Literacy: Evidence from Somalia. Interna-
account opening for immigrants through alternative tional Journal of Economics and Financial Issues, 15(2),
onboarding methods. As they initially target niche markets,
226.
they will add offerings over time. While many of these of-
Bhatnagar, P., Rajesh, A., & Misra, R. (2024). A study
ferings are not yet profitable, they have strong disruptive
on online brand experience in Indian neobanking. In-
potential, and success may ultimately depend on persuad-
ing traditional banks to utilise the new technology and im- ternational Journal of System Assurance Engineering
prove customer experience. and Management, 1-18.
Chanson, G., & Rocchi, J. M. (2025). Will I survive?
6. Strategic Pathways for Neo Banks Focus on Legitimacy rather than Profitability! A csQCA
study of the organisational death of French online banks
To guarantee sustainable growth, neobanks must prioritise and so-called "neobanks. Finance Contrôle Stratégie,
the following: (27-3).
Establishing trust: Measures include apparent regu-
Indra, S., & Mohan, R. (2023). The missing links in
latory compliance, strong security, and transparent pric-
Neobanks. In AI and Business, and Innovation Research:
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Understanding the potential and risks of AI for modern
Inclusive Finance: Using customised products and fi- enterprises (pp. 403-418). Cham: Springer Nature Swit-
nancial literacy campaigns to reach underbanked popu- zerland.
lations.
Roy, D., Pramanik, H. S., Bandyopadhyay, C., Datta, S.,
Data-driven Personalisation: Using AI to offer highly & Kirtania, M. (2025). Exploring the association model
customised experiences and predictive financial advice. across banks and fintechs in India. Qualitative Research
Strategic Partnerships: To increase reach, working in Financial Markets, 17(2), 312-347.
with banks, tech companies, and even e-commerce Web Articles:
platforms. https://cleartax.in/s/neo-banks-in-india, Adnan Ali

Diversifying into lending, investments, and SME financing https://www.drishtiias.com/daily-updates/daily-news-
is an example of a sustainable profit model. analysis/neobanks
https://www.ecb.europa.eu/press/intro/mip- nline/
7. Conclusion 2018/html/1803_revisedpsd.en.html
Neo banking represents a break from the traditional sce- https://www.forbes.com/advisor/in/banking/what-is-a-
nario in the financial ecosystem, balancing technological neobank/Jul 31, 2024, Jaya Vaidhyanathan, Aashika Jain
efficiencies with client innovation. While the sector still faces https://www.forbes.com/advisor/banking/what-is-a-
challenges concerning regulation, stability, cybersecurity, neobank/Jun 24, 2021, Stephanie Walden and Doug
and profitability, they have the scope, capability, and po- Whiteman
tential for neobanks to support financial inclusion, create https://freo.money/guides/neobanks-in-india/
personalised banking experiences, and disrupt the banking https://groww.in/blog/neo-banking-in-india
market. Future success will depend on trust-building, col-
laborative partnerships, and diversifying their offerings to https://www.lyra.com/in/what-is-a-neo-bank/
position themselves not only to compete alongside tradi- https://www.pwc.in/industries/financial-services/
tional financial institutions but also to reshape the banking fintech/fintech-insights/neobanks-and-the-next-bank-
experience in a digital future. ing-revolution.html, Raghav Aggarwal and Avneesh
Singh Narang
Fintech is the future of finance, and neo banking is the fu- https://razorpay.com/blog/business-banking/what-is-a-
ture of fintech. neobank/

40 | 2025 | OCTOBER | BANKING FINANCE