What is a Neobank in Canada?
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- Updated On:11-Aug-2023
- Replies:1
Short Answer
Neobanks are a modern-day concept of banks without physical branches which simplify banking services for individuals. Neobanks are an alternative to traditional banking services. They are advantageous in various ways as described in the following answer in detail.
Detailed Answer
What are Neobanks?
Neobanks are a new and modern-day concept in Canada. The term "Neo" means "new" or "revived". These are fully online digital financial institutions which provide various services related to banking without the presence of physical bank branches. Also referred to as virtual banks and challenger banks, as they are only operational through their websites and mobile applications.
A neobank is not a registered bank with a banking licence, they partner with traditional and large financial institutions such as major banks to provide their services to users via online space. A digital bank and a fintech company offering financial solutions to its customers.
And yes, don't confuse Online bank with Online banking! Traditional banks do offer online banking along with offline services, but online banks like neobanks provide online services only.
Neobanks in Canada
Neobanks in Canada have various modern-day features. The major features offered by them are:
- Technologically Advanced: Neobanks in Canada use various advanced technologies involving artificial intelligence and machine learning to offer various advantages, such as personalised financial advice, integration with other platforms and others.
- Convenience: As neobanks are fully digital platforms, they simplify banking services for their users. They provide easy to understand and user-friendly experience which enhances the user's convenience.
- Ease of Managing Finances: Neobanks have simplified managing finances for individuals. Many neobanks in Canada also offer features like budgeting tools and expense tracking and also allow money-saving progress tracking within the platform.
- Account Security: Neobanks partner with major charted banks in Canada. This ensures high security and encryption of the user's account which provides the essential level of security of the customer's capital.
- Fully Digital Infrastructure: Neobanks allow users to perform all the major banking activities through their mobile apps or website. Users can open accounts, make withdrawals and money transfers, pay bills and seek help from customer support from a single platform. This eliminates the need to physically visit a bank branch.
Conclusion:
The concept of neobanks has led to a large growth of the fintech sector in Canada and they offer more convenient and user-friendly alternatives to traditional banking methods. they are fully online interface allows users to perform various tasks from anywhere with only an active internet connection which promotes accessibility. Hence neo banks offer various advantages to their users in many ways.
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