Nice read! But why are these Neo banks not scaling up - is it because users are still apprehensive in opening accounts with Neo banks or there are any regulatory issues which are coming in their way of growth?
I don't think there are any regulatory issues. The way I see it, users are always apprehensive to use any new product, and much more when it comes to a new product that manages their money.
However, the two leading platforms - Jupiter and Fi - already have about 1 Mn users each, which, even if you consider a low active user rate, is pretty good.
They're targetting GenZ and millennials. And GenZ is yet to start opening their individual banks accounts, so it's too early to comment.
1- Are platforms like Fi, Jupiter acting as a mediator between Customers and Banks or they are probably thinking of opening their own banks as and when RBI puts some guidelines on Neobanks
2- Do they get additional commission from banks for maintaining the customer
3- They claim to provide 1% Cashback on online spends, so, do you think it's just a value proposition for Customer acquisition from Platform's end or you think Banks provide that
1. Currently they're a banking platform, not a bank. They don't have a banking license as yet, and at least the near future there's no news of RBI issuing licenses to neo-banks. Only time will tell.
2. That depends on their arrangement with the bank. Can't comment on that
3. Again, depends on the arrangement they have with the bank. Each platform has a different agreement with the bank, with different commercials, different offerings and different commissions.
Nice read! But why are these Neo banks not scaling up - is it because users are still apprehensive in opening accounts with Neo banks or there are any regulatory issues which are coming in their way of growth?
I don't think there are any regulatory issues. The way I see it, users are always apprehensive to use any new product, and much more when it comes to a new product that manages their money.
However, the two leading platforms - Jupiter and Fi - already have about 1 Mn users each, which, even if you consider a low active user rate, is pretty good.
They're targetting GenZ and millennials. And GenZ is yet to start opening their individual banks accounts, so it's too early to comment.
Very Insightful read!!
Wanted to know though:
1- Are platforms like Fi, Jupiter acting as a mediator between Customers and Banks or they are probably thinking of opening their own banks as and when RBI puts some guidelines on Neobanks
2- Do they get additional commission from banks for maintaining the customer
3- They claim to provide 1% Cashback on online spends, so, do you think it's just a value proposition for Customer acquisition from Platform's end or you think Banks provide that
Thanks Mukul!
1. Currently they're a banking platform, not a bank. They don't have a banking license as yet, and at least the near future there's no news of RBI issuing licenses to neo-banks. Only time will tell.
2. That depends on their arrangement with the bank. Can't comment on that
3. Again, depends on the arrangement they have with the bank. Each platform has a different agreement with the bank, with different commercials, different offerings and different commissions.
Hope that helps! 🙂
Very interesting and good read!
Can a NRI open NeoBank account?
I haven't heard of NRI accounts with them yet, but can't be too sure.