NeoBanks and a New Era of Banking Service

The word neo derives from the Greek neos, meaning ‘new’, and that’s exactly what neobanks are. A new way of banking that’s 100% digital, can be used by anyone with a smartphone.

Glimmers of traditional banking remain: neobanks are still a place to store money, borrow and make payments from – it’s how that banking is done that’s changed.

What are the benefits of neobanks?

• They’re mobile-native, meaning the host company has invested time and effort in creating a slick and speedy app interface.

• They’re 100% online. No more trips to the bank, no more waiting in line. Every service associated with the neobank is managed online.

• Accounts can be opened using just a valid ID, and will be up and running within minutes.

• Payments and loans are typically executed on a real-time basis.

• Neobanks generally don’t charge fees or require minimum balances, breaking down the barriers for people with limited access to traditional banking services.

• Artificial intelligence keeps track of customer data so the neobank can proactively offer personalized banking services relevant to each customer.

What’s the difference between neobanks and digital banks?

The difference between neobanks and digital banks is almost unnoticeable to the average user. Typically, digital banks are an off-shoot of a traditional bank, while neobanks are independent institutions.

How are neobanks solving core banking problems?

Neobanks are saving time and money for tech-savvy individuals and businesses who want banking services that make sense for them. Accounts can be opened within minutes, payments are sent and received faster, and it’s all managed from a smartphone.

Neobanks are leveling out the playing field for low- to medium-income earners by providing access to financial services they previously may not have qualified for. With functions such as paycheque advances, brokerage services, low-interest loans, and credit score ratings, neobank adopters can organize their finances directly from their smartphone and at a low cost.

Particularly useful for those in regional and remote areas without access to brick-and-mortar banks and the millions around the globe who are unbanked, neobanks are key to financial inclusivity.

Should I make the switch to a neobank?

It’s the convenience and agility of neobanks that make them so appealing to so many. Everyday banking tasks, such as depositing cheques or peer-to-peer lending, become effortless with the usual rigmarole cut out of the equation, and fees reduced or eliminated.

The platforms are usually entirely online, so as long as you’re comfortable engaging with a chatbot and confident with technology, your banking life is about to become a lot more efficient.

That said, the pared-back platform offers a drastically reduced number of functions compared to a regular bank. Credit is either limited or not offered at all, and the same goes for mortgages or other significant loans. Both may be subject to higher interest rates, so be sure to carry out a comparison with an online or traditional bank to secure the best deal.

Which are the top neobanks in the UAE?

payit (Powered by First Abu Dhabi Bank)

payit e-wallet was just awarded the Best Neobank Award and Best Innovation in User Experience at the MEA Finance Banking Technology Summit & Awards 2021, confirming it’s the best of the best. With a bright mobile-friendly interface, payit offers a fully-featured e-wallet with digital solutions tailored to the region’s tech-savvy population.

Liv. (Emirates NBD)

Named after its friendly chatbot Olivia, Liv. sets the tone for stress-free banking. An account can be opened within minutes and without any pesky paperwork. There are no physical branches, but Liv. comes with a lifestyle app so users can unlock discounts and prizes while managing their finances.

Mashreq Neo (Mashreq)

Mashreq Neo promises an up-and-running account within an impressive two minutes – all that’s needed is a UAE ID. This account comes with peace of mind, as the user is completely in control of their debit card via an app, making it easy to block and unblock cards in case of any suspicious transactions. 

NOW Money (Commercial Bank of Dubai)

NOW Money focuses on low-income and unbanked customers, offering instant bank accounts with no minimum balance required. Every account comes with a debit card, and international transactions are supported for sending money home at the touch of a button.

Rise (United Arab Bank)

Rise is the financial solution with a heart, unlocking banking for migrants supporting their families at home. With micro-loans and financial health checks, Rise is focused on helping migrants manage their money today, and invest for the future.

ADCB Hayyak (Abu Dhabi Commercial Bank)

‘Hayyak’ means welcome. It’s the perfect name for this digital banking solution, as it welcomes anyone over 21 and holding a valid UAE ID. Engineered to meet the needs of homemakers, salaried individuals, and the self-employed, Hayyak delivers a welcome pack to the new members’ doorstep, complete with physical cards that can be uploaded to a digital wallet.

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