{"id":13117,"date":"2022-11-07T11:26:39","date_gmt":"2022-11-07T05:56:39","guid":{"rendered":"https:\/\/blogrevamp.cashfree.com\/?p=13117"},"modified":"2022-12-13T18:24:39","modified_gmt":"2022-12-13T12:54:39","slug":"neobanks-vs-traditional-banks-vs-challenger-banks","status":"publish","type":"post","link":"https:\/\/blogrevamp.cashfree.com\/neobanks-vs-traditional-banks-vs-challenger-banks\/","title":{"rendered":"Neobanks vs Traditional Banks Vs Challenger Banks: Your A to Z Comparison Booklet"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #005c31;color:#005c31\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #005c31;color:#005c31\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/blogrevamp.cashfree.com\/neobanks-vs-traditional-banks-vs-challenger-banks\/#What_Is_A_Neobank\" >What Is A Neobank?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/blogrevamp.cashfree.com\/neobanks-vs-traditional-banks-vs-challenger-banks\/#Traditional_Banks_Vs_Challenger_Banks_Vs_Neobanks\" >Traditional Banks Vs Challenger Banks Vs Neobanks<\/a><\/li><\/ul><\/nav><\/div>\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p class=\"wp-block-paragraph\"><em>This 3 minutes read explores the differences between Traditional Banks Vs Challenger Banks Vs Non Banks- how they differ in organisation and services they provide.<\/em><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p class=\"wp-block-paragraph\">\u2018Neobank\u2019 are quite the buzzword in the payments and finance space.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In fact, As per <a href=\"https:\/\/www.statista.com\/statistics\/1228241\/neobanks-global-market-size\/\">Statista<\/a>, the market size of neobanks is growing at a rapid pace. The sector is estimated to reach a whopping USD 722.6 billion by 2028.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But how exactly are neobanks different from traditional banks? Or challenger banks, for the matter?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s uncover some answers in this piece.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-a-neobank\"><span class=\"ez-toc-section\" id=\"What_Is_A_Neobank\"><\/span>What Is A Neobank?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Neobanks are new-age banking players that are reshaping the finance sector. It\u2019s filling the gap between financial and Fintech firms and bringing their services under one, single umbrella.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For instance, a neobank offers an amalgamation of the following facilities.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Traditional banking services like:\n<ul class=\"wp-block-list\">\n<li>Cash deposit and withdrawal&nbsp;<\/li>\n\n\n\n<li>Open and operate a bank account&nbsp;<\/li>\n\n\n\n<li>large-ticket loans&nbsp;<\/li>\n\n\n\n<li>Ledger support&nbsp;<\/li>\n\n\n\n<li>Credit cards with add-on features and benefits&nbsp;<\/li>\n\n\n\n<li>Saving schemes like fixed deposits, etc.&nbsp;<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Challenger banks services like:\n<ul class=\"wp-block-list\">\n<li>Payment gateway<\/li>\n\n\n\n<li>Digital wallets<\/li>\n\n\n\n<li>Asset management<\/li>\n\n\n\n<li>Small-ticket loans<\/li>\n\n\n\n<li>Peer-to-peer lending<\/li>\n\n\n\n<li>Alternative credit scoring<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Note, neobanks are digital-only banks that do not have any physical branches like traditional or challenger banks. They operate purely online, majorly via mobile apps. To state, they\u2019re an excellent banking plus financial management option, especially for the tech-savvy and the underbanked population.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-traditional-banks-vs-challenger-banks-vs-neobanks\"><span class=\"ez-toc-section\" id=\"Traditional_Banks_Vs_Challenger_Banks_Vs_Neobanks\"><\/span>Traditional Banks Vs Challenger Banks Vs Neobanks<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Neobanks are often confused with challenger banks. However, they\u2019re quite different from both traditional and challenger banks. Here\u2019s a table of differences for better understanding.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><\/td><td><strong>Traditional Banks (Monoliths)<\/strong><\/td><td><strong>Challenger Banks (Modulars)<\/strong><\/td><td><strong>Neobanks (Composible banks)<\/strong><\/td><\/tr><tr><td><strong>Structure &amp; function<\/strong><\/td><td>Legacy financial institutions are the licensed to accept deposits, disseminate on-demand cash, and make loans&nbsp;<\/td><td>Technology-driven financial institutions engaged in automating and improving the delivery of financial services<\/td><td>100% digitized financial service providers that use apps and online platforms to offer both modern and traditional banking services&nbsp;<\/td><\/tr><tr><td><strong>Purpose<\/strong><\/td><td>Focused on security and financial risk management<\/td><td>Focused on increasing customer base by offering new-age financial services&nbsp;&nbsp;<\/td><td>Focused on &nbsp; enhancing customer experience by offering personalized and customized traditional &amp; modern financial services<\/td><\/tr><tr><td><strong>Market coverage<\/strong><\/td><td>Larger market coverage<\/td><td>Comparatively smaller marketer coverage&nbsp;&nbsp;&nbsp;<\/td><td>Limited market coverage since neobanks offer 100% online services<\/td><\/tr><tr><td><strong>Technological reliance&nbsp;<\/strong><\/td><td>Does not rely heavily on technology for day-to-day activities<\/td><td>Relies heavily on technology<\/td><td>Relies heavily on technology<\/td><\/tr><tr><td><strong>Organizational structure<\/strong><\/td><td>Rigid organizational structure with restricted innovative measures&nbsp;<\/td><td>Flexible organizational structure with fewer barriers to trends that encourage innovation<\/td><td>The entire structure works on innovation to address the changing needs of the target audience<\/td><\/tr><tr><td><strong>Locations<\/strong><\/td><td>Brick &amp; mortar branches<\/td><td>Online + brick &amp; mortar branches&nbsp;<\/td><td>Only online branches<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The financial ecosystem is changing drastically.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Customer-centricity is taking the center-stage forcing financial institutions to revolve their activities around this very component.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It will be interesting to see how neobanks transform the financial services landscape.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Even more so, to witness how customers respond to transformations.&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This 3 minutes read explores the differences between Traditional Banks Vs Challenger Banks Vs Non Banks- how they differ in organisation and services they provide. \u2018Neobank\u2019 are quite the buzzword in the payments and finance space.&nbsp; In fact, As per Statista, the market size of neobanks is growing at a rapid pace. The sector is<\/p>\n","protected":false},"author":17,"featured_media":13415,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_themeisle_gutenberg_block_has_review":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_wpcom_ai_launchpad_first_post":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[1,1525],"tags":[1499],"class_list":["post-13117","post","type-post","status-publish","format-standard","has-post-thumbnail","category-all","category-banking","tag-banking-as-a-service"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Neobanks vs Traditional Banks Vs Challenger Banks: Your A to Z Comparison Booklet - Cashfree Payments Blog<\/title>\n<meta name=\"description\" content=\"The market size is estimated to reach a USD 722.6 billion by 2028.\u00a0But how exactly are neobanks different from traditional banks? 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