Ajar Upadhyay is the Head – India operations at Novo. In his role, he is responsible for leading the India team through designing the company’s in-house policies, overseeing the development of technology and product solutions, and enhancing overall customer experience.
The nature of banking has revolutionized over the years with the advent of new technologies. While traditional banking was mainly based on manual processes, modern banks are mostly digital, focused on transforming customer experience with convenience, transparency, and innovation at the core. Thanks to new concepts like neobanks that are leading this change in the banking ecosystem and providing customers with features and solutions that nobody had imagined before.
But what is a neobank?
At their simplest, neobanks are digital entities that leverage apps, software, and other technologies to offer banking services to users, without any physical presence or existence. This is why these banks have low operational costs and attracts today’s new-age consumers who prefer comfort and convenience over manual obligations. With smart and intuitive UI/UX, neobanks enable users to do so many things under a single platform such as fund transfer, savings, receiving payments, availing loans, and much more.
How it helps MSMEs?
Although the world is brimming with micro, small, and medium businesses, the biggest challenge they face is the lack of tools and technologies in order to grow in the online space and cater to the evolving needs of tech-savvy customers. However, the pandemic has acted as a game-changer for every business and industry by making neobanks more pivotal to their success and long-term growth.
As customers became more reluctant to visiting banks physically and turned to digital players, the scope for neobanks has significantly expanded. Likewise, several businesses across the globe have usually fought for access to formal credit when it comes to managing their day-to-day operations. Their informal nature of business, low turnover, and inability to provide collateral have always acted as barriers to avail loans from formal sources.
This is where neobanks come to the picture. By collaborating with other banks, these digital entities make overall lending smooth and seamless for businesses. They digitally onboard organizations through e-KYC and other paperless processes, and provide them with value-added services including opening savings/current accounts with licensed banks, opting for loans conveniently, ensuring compliance with GST norms, etc.
Not only this, but neobanks also provide players with an overview of various other factors such as business expenses and help them save money through various reserves and utilize them as and when required. This way businesses can analyze their business performance, leverage financial data, study customers better, and accordingly make informed decisions to excel in their financial journeys.
The pandemic has certainly widened the gap between what businesses want and what banks are capable to deliver. At the same time, it has also created new opportunities for fintech startups or neobanks to expand banking solutions to a wider customer base and serve them better with the right and robust financial solutions in real-time with the help of the latest technologies like AI and ML. In fact, these banks have now become a necessity in the new world order with more and more consumers flocking towards online channels for full-scale banking services tailored for their fast-evolving needs.