Neo Banking vs. Challenger Banks: Key Differences & Market Trends
Introduction The financial landscape has evolved rapidly, with traditional banking models being disrupted by fintech innovations. Two significant players in this evolution are neo banks and challenger banks . While both offer digital-first banking solutions, they differ in regulatory frameworks, services, and target markets. In this article, we’ll explore the key differences between neo banks and challenger banks, their respective market trends, and what the future holds for digital banking. What is a Neo Bank? A neo bank is a digital-only banking platform that operates without a physical branch. Unlike traditional banks, neo banks do not hold a banking license; instead, they partner with licensed financial institutions to offer banking services. Features of Neo Banks: Fully Digital Experience: No physical branches, with services accessed through mobile apps and websites. Third-Party Partnerships: Neo banks rely on licensed banking partners for operat...