Know All About Neo Banks In UAE

Neo Bank – Introduction

 

Neo banks offer complete digital banking services. Simply put, they are not present physically. Transactions in traditional banks could take a lot of time and effort. Neo banks add an immersive, digital layer on top of conventional banking and offer a seamless online experience. Customers can easily create accounts online within seconds using technology such as face reading etc.,

As they provide numerous advantages to fulfil the changing needs of new-age consumers, neobanks are increasingly becoming a preferred option for customers in many countries. They tend to make banking more user-friendly and meet their customer needs easily.

UAE has one of the highest digital and smartphone penetration in the world. This creates an attractive ecosystem for banks and fintechs to launch digital solutions. Neo banks have seized this opportunity and offer services that are driven by technology attracting Millennials and tech-savvy customers.

To customers, long lines at traditional brick-and-mortar banks may feel interminable. Neobanks make it simple for users to open accounts in a seamless manner with just an Emirates id.

Neobanks are quickly rising to prominence as a potential alternative to traditional banks, who have been reluctant to provide financial services to certain specific segments such as startups, self-employed and blue-collar employees.

What are the different forms of Neobanks?

Neo bank front end focused

Neo banks that are front-end-focused do not hold an operating banking license. They typically depend on the support of a conventional financial institution and works in collaboration with them to offer services to its clients.

Digital banking Units

The online branches of a traditional bank are known as stand-alone or independent digital banks. Mashreq Neo and ENBD Liv are a couple of examples. To operate a stand-alone digital bank, a virtual banking license is required. Once these banks have enough capital to guarantee the deposits of their investors, they can obtain their banking licenses.

Complete digital banks (licensed)

Full-stack digital banks offer a wide range of services and are approved by the necessary banking authorities. They keep their independent brands, balance sheets, and deposit and lending operations. These banks are not encumbered by the expensive networks of physical branch locations in an increasingly digital environment.

What is the difference between Neo banks and traditional banks offering online banking services?

Neobanks are distinct from conventional banks in many ways. However, given how similar neobanks and digital banks are, it can be slightly confusing to tell them apart. Traditional banks provide online banking services to their existing customers as a part of their solution. While these are options provided to their existing customers, online banking is just another form of banking similar to telephone banking ( IVR based).

Neobanks, in contrast, exist primarily independently of regular banks and are entirely digital. Unlike conventional banks, they do not have any physical branches.

While traditional banks use a combination of physical branches and online presence, they offer a variety of personalized services only online.

Compared to regular banks, neobanks only provide a limited number of services, but these services are frequently highly personalized using innovative technologies like AI.

While governments are supportive of fintech developments, neobanks confront numerous compliance, safety, and regulatory challenges. They have some advantages and disadvantages, like other financial institutions:

Pros

Lower operational costs: They spend less on overhead because they do not need any physical infrastructure to manage physical branches. Banks pass back some of the saved costs as free features or rewards to customers.

Speed and Efficiency: Making payments is one of several simple daily actions that may be done anytime, anyplace. Their customer care is tailored, and the usage of AI enables real-time resolution of consumer issues.

Security: Neo banks do not rely on outdated, legacy technology and hence tend to have stringent measures for the privacy, security, and safety of their platforms. The complete safety of customer data becomes a priority.

Cons

Personal assistance is lacking, which may be frustrating for most users when dealing with complicated financial processes or transactions. Because they do not provide the same variety of services as traditional banks, some segments of the population, such as senior persons and less tech-savvy clients, might not feel comfortable using neobanks for specific types of transactions.

Lack of dependability and trust: Neo banking is the contemporary substitute for traditional banking; however, it lacks the latter’s decades of operational experience. Before deciding to pay up for premium services, users may need to use their services for a while—for free—to gain familiarity and confidence.

Lack of clear legal framework and protocol: Neobanks are unable to operate independently and are unable to accept deposits or offer to lend products from their own books. They frequently have fewer regulations than conventional banks.

Consumers with lower incomes are likely to be the ones who oppose fees the most. The neobanks were previously able to subsidize the operating costs of gaining and maintaining clients; however, they will now need to find alternative means of achieving profitability.

What is Mashreq Neo and its benefits?

Mashreq Neo is one of the best digital-only banks in the United Arab Emirates. This digital bank, which was introduced in 2017 by Dubai-based Mashreq Bank, offers a wide range of services to meet the demands of contemporary banking. Mashreq Neo was named the Best Mobile Banking App in the Middle East by World Finance in 2020.

Mashreq Neo users can bank securely and conveniently with an emphasis on security. No matter what kind of account it is, from a current account to savings, salary, or investment accounts, users will quickly start enjoying the benefits of their digital bank account thanks to a straightforward enrollment process and innovative security features.

Mashreq Neo users can receive up to 350 AED in rewards during their first 90 days with the bank. This digital bank offers more than simply banking; from the same digital platform, you can invest in stocks, foreign exchange, and precious metals. Digital simplicity at its absolute best!

Users can use the official app to manage their finances digitally after setting up their Mashreq Neo accounts online. Both the Apple and Google Play app stores offer the Mashreq Neo app.

Mashreq Neo currently offers:

1. Current Accounts: Neo Smart and Neo Salary
2. Savings Account: Neo Savings
3. Business Account: Neo Biz (which again has options for different target segments)
4. Children: Neo NXT is for children aged 12 to 18 years.

Emirates NBD’s Liv Bank

Liv is aware that digital banking has always been progressive. Therefore, digital generation was considered when creating this bank. This bank, which was introduced in 2017 by Emirates NBD, has always catered to Millennials and Gen Z in the UAE.

This is a fantastic alternative for anyone wishing to move their banking needs online because it has amazing features and an easy-to-use platform. Across reality, Liv already has over 300,000 customers who bank there in the Middle East. There are numerous benefits to joining this bank, from the wide range of discounts provided to Liv’s digital bankers to the aggressive 2% return on account balances of more than 5000 AED.

Liv created The Challenger, a feature of their site made to assist users in fulfilling banking objectives and track costs, to help you manage your money better.

Users can utilize Liv’s Apple or Android app to conduct their banking once they have digitally signed up with the company. Liv’s popularity led to the 2019 launch of E20, a new digital banking platform by Emirates NBD that focuses on digital business banking.

YAP

One of the top digital banks in the United Arab Emirates was introduced by RAKBANK in 2021 with the launch of YAP. YAP, which means “pay” spelt backwards, recognizes how hectic modern life can be and works to make using digital banking as simple as possible. The digital banking system from YAP puts you in control of your money!

The process of opening a YAP account is quick and paperless. Users of YAP can bank easily, securely, and with peace of mind thanks to the most up-to-date technology and security features. You will be able to monitor your financial decisions in addition to the financial analytical capabilities provided by the YAP app.

YAP has no intention of slowing down! YAP wants to collaborate with banks in other regions to broaden the reach of their services with the goal of becoming one of the top digital banks in the Middle East, South Asia, and Africa. Foresight like this is exactly what digital bankers require!

You may quickly establish your account after downloading the YAP app from Google Play or the Apple App Store. RAKBANK will then give you an IBAN number and send you your banking card.

Smart Banking by ADIB

Abu Dhabi Islamic Bank (ADIB) developed Smart Banking, a brand-new online banking service accessible to UAE citizens. Your card will be sent directly to your door once you’ve setup your online Smart Banking account. You can use technology to manage the rest!

There are numerous advantages to affiliating with this forward-thinking digital bank, from savings through Smart Banking throughout the Middle East to fee-free withdrawals from ADIB ATMs in the UAE. Smart Banking knows what contemporary customers want from a digital-only bank because it gives you the ability to manage your bank account directly from your smartphone.

Also, you are not by yourself in this. You can connect with other digital bankers in the Middle East through the huge online community MoneySmart. This enables you to exchange knowledge and seek guidance from peers and industry leaders.

By installing the software from Google Play or the Apple App Store, users can register for SmartBanking. Your banking experience will be entirely digital once your card is delivered! This is a wonderful digital bank for citizens of the UAE, with new services being added frequently.

Xpence

Xpence is a fantastic digital-only choice for business banking that will be accessible to people who live in the United Arab Emirates. There is an ideal digital current account for many distinct financial needs, including those of freelancers, startups, micro businesses, and SEMs.

Users will be able to record receipts, handle invoicing, and reduce bookkeeping time with the help of Xpence’s innovative digital platform. Virtual Visa business cards will be available for users to issue for themselves and their teams. The option of receiving actual Visa cards in the mail is also available.

With its wealth of useful features, Xpence will not only help you save time but also improve your financial efficiency and responsibility. Users of Xpence may track and improve their spending habits because of the platform’s simplicity. Even more, users will be able to interact with one another via a distinctive online community.

Xpence offers a number of services that traditional banks do not, like integrated e-commerce, automatic bookkeeping, and, of course, digital enrollment. You can sign up for the Xpence waiting list online if you are interested in joining. The palm of your hand already contains the future of digital business banking!

For user deposits, Zand Digital Bank provides attractive interest rates of about 2%. Zand intends to be one of the strongest rivals in the UAE’s already-competitive digital banking market.

Zand provides its customers with accounts, cards, loans, and monetary management tools. Zand is undoubtedly an excellent digital banking choice for people in the UAE, especially in a society that values remoteness and is modelled after the most successful digital banks in the European market.

Summary

There has been a significant trend toward more remote and digital ways of doing things in recent years, and because of current events, more and more attention is being paid to enhancing our digital experiences and how much we can do with the help of our smart gadgets, from school to business. In the digital era, banking follows the same pattern!

Many digital banks throughout the world are altering how we conduct banking transactions for both personal and business accounts. There are several different digital banks in the UAE as a result.

The typical consumer seeks individualized and comprehensive monetary management solutions. More than ever, millennials and members of Generation Z are financially literate. Neobanks capitalize on their advantages by utilizing technology to create appealing features that monitor customers’ cash flow and financial activity and suggest appropriate instruments. Neobanks are a reliable source for people looking for seamless, inexpensive services, high-interest savings accounts, and low-interest credit.