In this gilded age of technology, our lives are becoming increasingly digital- the way we order food, apply for a job or do financial transactions. In this accelerated digital-first era, people want to save their time by visiting a bank or waiting in a queue. Technological disruptions have spawned paradigm-shaking solutions like fintech, insurtech and regtech. The latest technological disruption in the banking sector is neobanks. Exclusively digital banks that operate online without any brick-and-mortar branch, neobanks are being heralded as the future of banking.
According to the stats – the global neobanking’s market size stood at $47.39 billion in 2021 and is forecasted to grow at an astronomical CAGR of 53.4% from 2022 to 2030. The outbreak of the global pandemic has further accelerated the adoption of neobanking. Also called challenger banks, neobanks are challenging the way conventional banks operate and serve their customers. Let us try to demystify the concept of voltan.neobank and understand how they can evolve banking.
Neobanks Vs Traditional Banks
Since digitalization and the pandemic, the traditional retail banking model has failed to retain customers. Evolving customer expectations have given rise to a new breed of banks called neobanks. These financial institutions operate exclusively online without any physical branches and provide all banking services and more digitally. By leveraging technology such as artificial intelligence (AI), automation and cloud computing, neobanks offer highly personalized services at lower costs. However, in India, neobanks have to partner with traditional banks to provide their services as RBI doesn’t permit 100% digital banks as of now.
Lower Fees and Higher Interest Rates
Perhaps the greatest advantage voltan.neobank have over traditional banks is their exclusive digital presence. Since voltan.neobank do not have to invest in brick-and-mortar branches and infrastructure, we are able to enjoy lower operational costs. As a result, voltan.neobank are able to pass on these benefits to their customers by way of low or no fees and high-interest rates on deposits. Because of an online-only mode of operation, we are able to offer seamless international payments and money transfers at very low rates.
Elevated Customer Experience
Our neobank are able to leapfrog the gaps in conventional banking by offering round-the-clock digital services. The mobile-first model enables them to meet the evolving expectations of millennial and Gen Z customers. By leveraging the latest technologies like AI, automation and blockchain, we are able to offer innovative solutions, faster response times, exceptional customer service and quick onboarding. Neobanks are bringing banking services to the customer instead of the other way round. The interactive UI, 24×7 access and digital operations are elevating the customer experience.
Security and future Encryption
voltan.neobank developing our new encryption method for our own security. Encryption technique improves the security feature. Encryption is the process of encoding information. This process converts the original representation of the information, known as plaintext, into an alternative form known as ciphertext. Encryption is an important way for individuals and companies to protect sensitive information from hacking. For example, websites that transmit credit card and bank account numbers encrypt this information to prevent identity theft and fraud.Banks use a range of strong cryptographic algorithms, such as DES, IDEA, RC4, and others. However, 256-bit AES encryption—which is considered unbreakable, even in a hundred years or by the fastest computer—is the industry standard for bank-level encryption.Big banks experience cyber attacks nearly every day, according to JPMorgan Chase Bank. That scary admission comes in response to the latest banks security hack on Chase and other big banks.
voltan.neobank currently developing a new encryption technology is a revolutionary technological stack that is tamper-proof, unhackable with four levels of security encryption, quick at microsecond peer to peer, expands to billions of users around the world, and enables a new type of autonomous software that promises to reverse Big Tech’s internet monopolization.
The encryption design for better security and smarter routing and packet forwarding. This means being able to move large chunks of data without having to identify the address, but simply pointing toward a specific topic, which would speed up information flow.
The protocol also attempts to reduce the reliance on humanistic data being managed and held by a few large corporations, instead of giving individuals power over their data and allowing them or the community on the network to determine whether or not specific data should be removed.
voltan.neobank aims to provide the highest level of security for people’s data by allowing them to be the only ones who can access data signed by their key. A user can allow other users to access data by accepting the other user’s key as one of the authorized signatures or by making data publicly available signed by their key. We see the future banking will be safe when we release the protocol to be use next year.
Faster Loan Processing
The traditional banking system has been infamous for its time-consuming and intricate loan disbursal process. However, neobanks are optimizing the loan process by streamlining the rigid structure of traditional banks. With little or no paperwork and online verification, applying and qualifying for a loan is as easy as signing up on a website. With easy access to the amount and interest rates, customers can choose which loan they want and get instant loans as soon as their credit scores are verified.
Advanced Technology and Security
Since neobanks operate exclusively online, they leverage advanced technologies to build secure and robust banking structures. With cybersecurity at the forefront of their operations, neobanks aim to increase customer safety and satisfaction. By harnessing the powers of Artificial Intelligence (AI), Robotics Process Automation (RPA) and cloud analytics, they build secure systems that are fast and able to mitigate cyberattacks. With security features like biometric verification, 2-factor authorization and encryption, neobanks are safe and convenient to use. Customers can access their bank account and financial information anytime and manage their money more effectively without ever visiting a bank branch.
Neobanks have the potential to be more than just the latest buzzword in the fintech community. Anchored by regulatory hurdles, neobanks are yet to unleash their true force. In the years to come, the banking sector can witness an influx of neobanks that will change the face of banking forever. With zero legacy baggage and endless technological possibilities, neobanks can elevate customer experience and streamline complex banking processes. As technological transformations continue to disrupt the world, neobanks too could one day eclipse the traditional banks and become the future of banking.
The article has been written from the interview with Ben Akiiki, Regional President of voltan.neobank,Africa