• Serge Beck, CEO & Founder at Optherium Labs


• 21.09.2022 10:30 am
#neobank

With a current market size of $66.82 billion, as estimated by Statista, Neobanks is projected to rise to a staggering market size of over two trillion in 2030 with a CAGR of 53.4 per cent. It’s one of the fastest-growing industries.

This means competition will be increasingly tough as the market expands and more people begin to adopt the innovations presented by neobanks. So, what are some must-have features for a neobank to succeed?

Neobank Apps Should Be Convenient

Before anything else, when you think of the term ‘neobank,’ you think of mobile applications. If you’re running a white-label digital bank, and your mobile application isn’t quick and doesn’t provide a seamless experience in all of its features, you will quickly lose clients as soon as they are onboarded.

UI/UX is a very important part of the success of your mobile application. Many third-party banking-as-a-service solutions offer machine learning and artificial intelligence algorithms that study each separate user on your platform and adjust the user interface of their application so that it matches the needs of the customer. That way, they will almost always see what they’re looking for first, which further increases revenue per user for the digital banking platform as it shortens the distance between a micro-conversion and the user.

Pricing and Accessibility

Before diving deep into providing complex features, the business model, pricing, and accessibility of your white-label neo bank must be intact. Many neobanks like Revolut offer free features which, after a certain amount of use, start charging fees. One example is a marketplace where users can enjoy a wide variety of tools such as buying and selling stocks, precious metals, and other financial instruments.

In terms of payments, a widely accepted business model is to not charge a monthly service fee like traditional brick-and-mortar banks. 

Neobank Must-Have Features 

If you’re into white-label digital banking, no matter your low pricing and high level of accessibility, if you don’t offer great features to your customers, they will drop out of the funnel soon.

Over 63% of users have access to mobile banking in one form or another. Some of the most sought features are:

• Instant money transfer with 72%.

• Free banking with 49%

• Splitting bills with friends 35%.

• Mobile banking app, easy to use 34%.

• Foreign Exchange Access 21%.

• Saving options such as Vaults 17%.

• Budgeting and Spending information 10%.

There was a general consensus among the surveyed that instant money (P2P) transfer is the most important feature a neobank must have, followed by free banking. Fortunately, there are third-party banking-as-a-service solutions that offer all of the aforementioned features and more that you can easily implement into your system.

Since the majority of brick-and-mortar have already realized that this constitutes a great threat to their survival in the future, many traditional banks have already invested a lot of capital into developing mobile apps and P2P payments of their own. Neobank owners should stay ahead by constantly coming up with new features, most of which should be free or at least partially free to the users, such as budgeting and having a shares/commodities marketplace.

Biometric Security & Technology

Not only does it look professional to unlock your banking app with your fingerprint, face, or voice, but it’s also a lot more secure than using a pin code for various reasons. Number one of which is the fact that the majority of mobile phishing or online virus campaigns steal raw information from your device, such as where you touch the screen.

That allows the wrongdoer to store your passcode and use it at a later time to authorize transactions. With biometrics, this could never happen. 

Neobanks Should Have Multiple Payment Options

P2P, ACH, and A2A payments are must-haves if you want to be in the game. As mentioned above, the majority of the users, over 70%, utilize neobank mobile applications because of instant money transfers. Being able to send money to various channels gives the user freedom to choose and the convenience to deposit or transfer right away. 

Multiple Tiers

Some neobanks have reached a point in their development where they have already acquired a very large user base and are looking for more ways to monetize their customers. A great way to do so is by limiting some functionalities with charges and fees over a certain number of uses and implementing subscription-based tiers, which the users can sign up for.

These tiers can also come with bonuses like discounts, points, or even physical items like luxury metal debit cards.

Speed and Convenience

These are the two words that should sum up the experience of anyone using your neobank for it to be successful. It shouldn’t take more than a few minutes, just a mobile device and an ID, in order to get onboarded onto the neobank as a new client.

From then on, the user experience should be seamless, and they should be able to find the aforementioned features that they might be looking for in a relevant sequence. Neither an abundance of features nor a great user interface and experience can do the job on their own. However, combining these two things with no service fees and a large pool of instruments and features will make your neobank competitive.

Final Words

With the neobank industry on the rise, competition also increases, and it gets much harder to get a larger portion of your target audience to sign up. For that very same reason, ensuring that there’s no churn at all is one of the key success points for neobanks, especially in the stage of growth. Focus on having all the innovative features available for your new users. That is easy to achieve with the help of third-party banking-as-a-service providers.