Neobanks in India: Innovation, Challenges and Opportunities in the Banking Industry

Neobanks, also known as digital banks, is a new form of financial institutions that operate exclusively online, without the presence of physical branches. These banks leverage advanced technology for offering innovative and customer-centric banking services. This paper provides a comprehensive review of the evolution, growth, and current landscape of neobanks, highlighting their key differences compared to traditional banks and some of the specific challenges they face in India. The study also assesses the scope and future prospects of neobanks in India, analyzing opportunities for growth amidst regulatory challenges and market situations. This paper also focuses on the global performance of neobanks, particularly in Europe and Korea, and draw comparisons with the Indian context. This paper aims to explore the transformative potential of neobanks in the financial sector. The findings suggest that despite significant regulatory and cybersecurity challenges, neobanks have the potential to redefine the banking experience by offering seamless, user-friendly services tailored to the modern, tech-savvy consumer.