The growth of new players in the financial sector is a wake-up call for traditional banks, which need to adapt to the digital transformation process and avoid being left behind
nto the financial scene by targeting a very specific audience: the
and millennial generations, who
prefer banking solutions that are readily available on their cell phones.
The trend began in the UK and Germany and has expanded rapidly in Europe and Latin America.
and four of the
biggest are Latin American:
This dramatic growth goes hand in hand with the low structural costs
as well as
due to technolog
t the beginning
they only offered payment services
they offer a variety of services
accounts, debit and credit cards, transfers, financial management, loans, and more.
The arrival and of subsequent expansion of neo-banks are a wake-up call for traditional lenders, which need to adapt to the digital transformation
processes and avoid being left behind, because more and more users prefer to use mobile banking,
, a fintech as a service (FaaS) that offers payment solutions, showed that 65% of Mexicans said they would be willing to leave their traditional bank for a digital one.
So, what makes these new financial institutions so attractive? From a superior user experience to new economic models, neo-banks
several advantages when it comes to acquiring new customers.
, practicality, time savings
the fact that all
services are virtual. Users can
without leaving home,
their financial information
in real time.
the opportunity for instant, low-cost transfers
the time of day,
and attract attention in a society that is constantly engaged in economic
As a result, user
good navigation experience
an application that is customer-centric, easy to use and cost-effective, satisfying their
around the clock.
, these new financial institutions still face many challenges compared
While their wide range of d
such as QR payments and e-wallets
, may make them more attractive,
they are not
neo-banks wouldn’t be an option for all users due to their lack of product diversity and because they have not yet gained the trust of customers.
have been adding
to their offerings
at an accelerated pace
many do not
all the services that banks
, such as mortgages or transactional services for businesses. Nor have they been able to attract users who prefer physical branches.
Regulatory hurdles may be the biggest obstacle. The path to obtain a banking license or fintech license can take years depending on the country and the structure of the
This absence of a
the user's trust in th
In the case of
regulation offers an assurance of reliability
first neo-banks and challenger banks
couple of decades ago, the dilemma was whether these new business models would replace traditional banking.
it is abundantly clear that both concepts can coexist, but
the incumbents need to streamline their digital operations in order to compete.
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