Shibabrata Bhaumik, popularly known as “Fintech Chanakya” the ex banker of Lloyds and Barclays and the founder of Fintech startup PayQ recently started its banking unit as PayqNeo.
Though the neo-banking ecosystem in the country is already getting crowded, Shibabrata wants to engender unified experience through fintech skill and technological innovations which includes Artificial Intelligence (AI) and a superior mobile banking experience through an app or a website.
A neo-bank is a digital banking platform, which offers all basic banking services like account opening, credit, insurance and others, but without a branch-led model.
Startups or Small Businesses with global customer outreach typically prefers to work with a Neobank as the account opening procedure is simple and less complex and you can use the banking services worldwide without any cross border hassle and dominion limitation.
Shibabrata’s UK start up PayQ aims to offer a wide range of services like faster account opening, mobile deposits, digital debit card, credit, digital payments and many more without the burden of a physical network.
The biggest challenge that PayQ might face is the hard-hitting directives by the Indian banking governing body RBI. Reserve Bank of India (RBI) doesn’t recognize digital banks, though they experiment with payment banks and small finance banks, these are not full-service digital banking platforms. India does not offer any neo-banking license unlike other countries like Singapore and Hong Kong. But NeoBank companies’ partner with banks, riding on their licenses, to create a digital banking experience for their consumers.
That’s why Shibabrata kept the regulations of the company PayQ under the law of the United Kingdom, where EU régime is stress-free and banking partnership is rather simpler than in India. Therefore, PayQ Neo officially being headquartered in the United Kingdom can actually work with worldwide customers and acquire new banking relationships.
Neo Banks in India are rising but will take some time to disrupt. Neo Banks is expected to raise $394 bn by 2026. In India too, Neo Banks segment is scaling up and they raised $90 mn last year. Currently, 10 Neo Banks are operating in India along with PayQ and a few more are in the pipeline to begin their operations.
What is PayQ doing different from its predecessors and other Neo Bank Prototypes?
BESIEGED CUSTOMER SEGMENT
PayQNeo is proficient in easier customer acquisition- customers include tech savvy millenarian, Pursuing the Asian SME and MSE and low ticket salaried class, which are not the focus areas of legacy banks at the moment.
TRUNCATED PRICING CUTTING
Lower costs, due to lack of physical branches and low capital investment, minimal staff and no additional operating cost.
LOWER FEES/CHARGES AND EASIER CUSTOMER ACQUISITION
As the cost of operations is trivial, the company can offer the cashbacks and offer much loftier than the traditional bank that operate within the obdurate limits.
BORN IN THE CLOUD’ TECH PLATFORM
The chances of physical damage of the server is almost impossible as the data is backed up in cloud server and can be recalled into any system with secure nodes , with encryption technology.
SPECIALISED BUSINESS BANKING SOLUTIONS
With a whole array of services including payments, receivables, budget and spend management. Globally, the PayQNeo also operate in, credit cards, forex cards and payments, cash flow management and business banking services, expense management and loan products.
Neo Banks Related FAQ Answered by Shibabrata:
Answer 1: As said by Shibabrata Bhaumik in above article, 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.
Answer2 : A neobank is a kind of digital bank without any branches. Rather than being physically present at a specific location, neobanking is entirely online. Shibabrata Bhaumik stresses that, Neobanks can be called fintech firms that provide digital and mobile-first financial solutions payments and money transfers, money lending, and more.
Answer 3 : When asked this, Shibabrata Bhaumik explained that neobanks use existing frameworks and physical entities established by traditional banks, like ATMs, they can reallocate their funds to build AI driven customer service frameworks, and deliver no fee bank accounts, low fee home loans and savings accounts with high interest rates.
Answer 4 : Just like other banks, neobanks employ a range of security measures to ensure that your money and details are protected. Shibabrata also mentions because these are mobile-based banks, some of that security responsibility also falls on you as a user - just like it does if you use an app with your current bank.
Answer 5 : The first big difference between neo and challenger banks is their physical presence. PayQ founder Shibabrata Bhaumik explains that Neobanks are entirely digital, cloud-based concerns that reach out to their customers from web platforms and mobile applications.
Answer 6 Online banks are safe to use as long as they're federally insured and you take some simple steps to protect your information. This is good because online banks often offer the most competitive rates. Shibabrata Bhaumik plans to create a video series on his youtube channel to explain about the safety of online banks and how to protect yourself.
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