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Banks and neo-banks working to serve the customer
In just eight years, technology has revolutionized the way customers use banking services. First appearing in 2009, neo-banks respond to a portion of these new behaviors. Alongside traditional banking players, they offer customers a new banking experience.
Neo-banks in the spirit of the times
Mobile, autonomous and connected—three words that describe today’s consumers. Along with new behaviors come new priorities. So what are banking customers looking for today? Speed, practicality and independence, through a line of services available round the clock via a computer or mobile device to carry out their most basic transactions—money transfers, consulting account activity, etc.
That is exactly what neo-banks deliver through their 100% digital model, with no network of brick-and-mortar locations. Opening a new account is fast and simple. In most cases, customers just need to download an app, since neo-banks generally require only minimal proof of identity. They also provide a full range of basic banking services available on-demand and at any moment, as well as budgeting tools (notifications, visualizations, predictive simulations, etc.).
What is the difference between online banks and neo-banks?
It may be tough to tell them apart, but these are indeed two distinct banking models. However, they both pursue one common objective — offering banking services adapted to new uses.
Most often affiliated with a traditional bank, online banks rely on existing infrastructure to offer a full line of products and services—bank accounts and cards, savings products, mortgages, insurance, investments, etc. Customers can access all these services by computer or mobile device.
For example, Hello Bank!, the entirely online bank by BNP Paribas. Customers can reach Hello Bank! representatives in real time by chat and on social media, where representatives can offer extended hours to answer questions from their busy clientele.
For their part, neo-banks share more similarities with FinTechs. Possessing a banking license, they generally offer “basic necessity” banking services, such as opening an account and obtaining a payment card. Smartphones remain the preferred route for contacting these banks. In July 2017, BNP Paribas acquired the neo-bank Nickel, an acquisition that has enabled the Group to expand its offering dedicated to new banking uses.
Neo-banks and traditional banks—two complementary offersWhile the innovative services offered by neo-banks help to simplify and streamline certain transactions, even cutting out certain services altogether, branches and representatives still play a crucial role in many actions and decisions. That’s why most neo-bank customers also keep an account with a traditional bank. Working with multiple banks enables customers to move seamlessly between channels, according to their needs. For example, they may opt for a neo-bank to complete daily transactions like consulting their account balance, submitting a payment or withdrawing cash.
At the same time, they may prefer to visit a traditional bank when taking out a mortgage or seeking valuable advice on how to manage their capital.
At some point, almost every customer will need to talk with a branch representative IRL (in real life). Proving this point, 57% of French customers still prefer to visit their local branch and meet with a representative for complex operations like buying property, transferring assets or planning a professional project.
And in a world where digital and physical services go hand in hand, it’s crucial for banks to streamline customer journeys more than ever. That is why a growing number of FinTechs have started teaming up with traditional banks. It’s a great way to give customers the best of both worlds: financial expertise, personalized service, security and management tools available 24/7, as well as practical and rapid banking solutions.
Nickel—the neo-bank taking the industry by stormWith more than 940,000 customers, Nickel (BNP Paribas Group) has opened the most bank accounts in France of any neo-banks. Its advantages include a simple and 100% connected line of financial services. It also includes a “rechargeable” account with an international MasterCard and the account details needed for purchases, withdrawals and money transfers. Since May 2018, Nickel has offered Nickel Chrome, a new card for customers who want additional services and insurance—no-fee foreign purchases, travel insurance, insurance in case of stolen ID or keys, etc.
Header image © Drobot Dean
Images © Alisa and © Jacob Lund
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