Neobank

A neobank (also known as an online bank, internet-only bank, virtual bank or digital bank) is a type of direct bank that operates exclusively online without traditional physical branch networks.[1][2] The term "challenger bank" is used in the UK to refer to a number of fintech banking startups that emerged in the wake of the 2007–2009 financial crisis. Their services may be accessed by clients through their respective computers or mobile devices.

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    The range of services provided by neobanks is not as broad as that of their traditional counterparts. Unlike incumbent banks, a large portion of the income of neobanks is mainly made up of transaction fees received when customers pay with their debit card.[3]

    History

    The term neobank has been in use since at least 2016[1] to describe fintech-based financial providers that were challenging traditional banks. There were two main types of company that provided services digitally: companies that applied for their own banking license and companies in a relationship with a traditional bank to provide those financial services. The former were called challenger banks and the latter were called neobanks.

    References
    1. "Digital Economy Outlook" (PDF). BBVA Research. 2016. p. 12.{{cite web}}: CS1 maint: url-status (link)
    2. "The unstoppable rise of neobanks". World Finance. Retrieved 31 December 2018.
    3. Walden, Stephanie (2021-06-24). "What Is A Neobank?". Forbes Advisor. Retrieved 2021-11-21.
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