In the fast-growing financial services sector, neobanks are especially important. In recent years, the industry has attracted record investments, so perhaps neobanks can soon replace the system users are accustomed to. The pace of transformation of the financial
services industry in recent years has been driven by two dynamics: a growing customer preference for digital banking and personal financial solutions, and a regulatory environment that has supported and opened up the industry to non-financial companies and
entrepreneurs.
Many have been inspired by the success stories of Nubank, Revolut, Chime and other newcomers who want to replicate them. For example, Nubank managed to attract more users than Bank of America in less than a decade before the banking giant managed to catch
up in early 2021. Revolut became the most expensive fintech in the UK in 2021, and Chime is exceptionally popular among millennials and, increasingly, among Generation X.
1. Purpose
Neobanks are no different from any other successful business because they have succeeded by having a clear vision and value proposition and by working toward it. However, in the excitement of developing innovative solutions, entrepreneurs can be tempted
to focus too much on features and technology instead of identifying the specific problem they plan to solve for their customers.
The noebanks that have had the most success to date have a clear idea of what their target customer base needs and then develop unique services that meet those needs. Some companies believe that super-application noebank solutions, with all the bells and
whistles, answer every possible problem customers face. This is especially true in emerging markets, where demand is high but there is not yet any real segmentation between the different customer bases and the financial solutions they need.
By far the most successful fintech companies are those that work with specific niche customer bases and offer unique services and hyper-personalized customer experiences that traditional banks cannot provide.
2. Partners and Suppliers
Today's entrepreneurs creating neobanks have the advantage of choosing from an increasingly wide range of partners and suppliers. From partnering with a sponsor bank with a banking license that allows you to offer credit services to KYC providers, you have
all the tools you need to develop a groundbreaking financial services offering. Partnering with a sponsoring bank means you don't have to deal with the strict regulatory obligations that accompany any business operating in the financial services industry.
The ever-evolving fintech landscape means that the partners you have now may not be the partners you will have in the future. New technologies may emerge that will be needed at different stages of your product lifecycle. Thus, your software solution should
be vendor-independent so that you can switch between different APIs as needed.
It's also important for companies to create or acquire their internal technology. A modular technology platform based on microservices provides the flexibility needed to respond to changes in customer preferences and needs over time.
3. Team and Technology
Non-banks are software development businesses, and if they can leave the "financial" tasks and regulatory requirements to the sponsoring banks they partner with, they can focus on the "technology" that defines the banking offering.
Only a small percentage of fintech companies develop their products from scratch, creating their software technology because this development model is time-consuming and costly. Banking as a Service (BaaS) and white label solution providers do not require
large capital expenditures, significantly reduce time to market and give you access to technical expertise without having to invest in a costly team.
By choosing this route, you get access to off-the-shelf software solutions, including a banking back-end system, an API and, if necessary, a front-end solution. That way, the company doesn't have to build the system itself. Most popular neobanks started
that way, choosing to focus on their unique mission and value proposition rather than struggle to create their core banking technology.
If you decide to set up a digital bank, it's worth going to vendors whose expertise meets your expectations. There are plenty of providers on the market today who can shape and customize a unique solution just for you. We suggest that you choose one of the
trusted providers for example:
Velmie
Velmie has been helping customers launch digital banking solutions such as neobanks, payment apps and wallets for 7 years and will be able to put together a customized offering just for you. Velmie’s customers receive ongoing SLA support, easily customizable
modular software and a wide range of integrations with service providers. White-label platform allows to issue branded cards, implement savings and loans, make domestic and cross-border money transfers, conduct digital user education, and more. There are also
back-office features for security and compliance: RBAC, audit trail, SCA, reporting, AML, KYC.
RadarPayments
RadarPayments is a neobank solution with a fully customizable SaaS platform. They specialize in creating competitive financial products for neobanks, digital banks, payment service providers and acquirers. RadarPayments through a tip payment solution. This
tool helps banks attract customers while generating additional revenue by charging a small fee for each tip provided. RadarPayments also offers many payment options that are secure, customer-centric and designed to fit your needs, but at a bargain price.
Mambu
Mambu is a cloud-based, neobanking solutions system that allows banks and financial institutions to conduct and manage financial transactions. Enterprises can develop, configure and deploy banking and credit services using an integrated composite banking
system, interacting with numerous external resources through APIs. The strategic partnership will allow joint customers to accelerate the launch of new payment products and services without having to dismantle and replace existing systems.