With new players and innovative concepts, it seems like there is no shortage of fresh things happening in banking these days. Ever hear of the banks Moven or Simple, or GoBank? How about Bluebird (American Express) or Mobile Money (T-Mobile)? These are all Neo-Banks.
So what is a “Neo-Bank”? In general, a neo-bank is an institution that provides checking, a prepaid debit card and some form of savings account without the traditional brick-and-mortar building. This usually includes features like mobile deposits, P2P payments, mobile budgeting tools and real-time digital receipts. In the U.S., these institutions are – directly or indirectly – FDIC insured.
The neo-banking experience is unlike traditional banking encounters that have soured so many people. They provide easy and simple account start-up with strong digital support, and exceptional (24/7) customer support. You do your banking via smart phones, at ATMs, or at locations like Wal-Mart or 7-Eleven. The neo-bank is ideal for young people with simple banking needs, the tech-savvy, those turned-off by traditional banks, and other groups such as expats. Watch for traditional banks to begin offering these services in the near future.