6. Neobanks

This chapter delves into the emergence of neobanks, digital-first financial institutions that offer banking services primarily through mobile apps and websites. It examines the challenges faced by traditional banks in adapting to digital transformations and the rise of neobanks as a response to these challenges. The chapter discusses the innovative services provided by neobanks, such as digital payments, AI-assisted customer interactions, and personalized financial planning. It also highlights the technological infrastructure supporting neobanks, including cloud computing, APIs, and AI, and the challenges they face, such as security concerns and customer awareness. Additionally, the chapter explores the role of neobanks in supporting Small and Medium Enterprises (SMEs) and the debate surrounding whether neobanks represent disruptive or sustaining innovation in the banking industry.