what is a neobank

Neobanks: what they are and how they work

We live in a technological society, the 21st century has only taken a giant step in this regard. Traditional banking is having its days numbered, and entities know it. The rise of a new concept, that of neobanks, has been hitting hard. In this article we help you understand what a neobank is and how it works.

The decline of traditional banking

Until very recently, banking was not understood without boring offices, where the waits used to be long and the treatment was not very warm. The disappearance of many bank branches thanks to the boom in online operations has led to the emergence of a new concept, that of neobanks. Traditional banking has ended up succumbing to recent banking modernization; and before this new element, highly appreciated among younger people.

What is a neobank?

Neo banks are financial entities that generally operate and provide the same services as traditional entities, but with one notable difference: they do not have physical entities. They have a banking license, so your money is guaranteed. All operations are carried out through the internet, either from a computer or from a mobile app. Although there is no personalized attention or anyone who attends you in person, they have very effective communication channels both via chat and telephone. They are modern entities for people who do not want ties, complications or waiting.

Neobanks can be used by any user. Although its dynamic appearance and its exclusive online operation make it an ideal product for restless and young people. Some of them, being of foreign origin, offer a bank account with a foreign IBAN , being able, in the case of N26 , to choose between the German IBAN of origin or a Spanish one. In addition to cards, some of them virtual , they offer banking products such as funds.

What are its advantages?

Neobanks have many advantages, but three of them should be highlighted:

  • Ease of opening an account : a video call in which our identity is verified is generally enough. Or send a copy or photograph of our ID through an application. Opening an account is very simple and in a matter of minutes.
  • Agile operation: everything can be done from your phone, which allows us to gain agility. The mobile phone and the smartwatch win the battle in finance.
  • Few commissions: or none. The operation is usually complete, although if you want a more prominent option. As a personalized attention, or a greater coverage in your bank card, you can opt for premium plans for a monthly amount.

For reasons like these, neobanks continue to attract more and more customers ,. They have managed to stand up to traditional banking and make them dust themselves off. If there are already things that we do not do the same as 20 years ago, one of them is managing our money. Are you a user of some of these neobanks?

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