Neobank

Online-only direct bank A neobank is a type of direct bank that operates exclusively using online banking without traditional physical branches. In contrast to direct banks, in many cases, neobanks do not have their own banking licenses, and instead rely on partner banks. They typically have lower operational costs, which can sometimes result in lower fees and more competitive interest rates. Neobanks typically share features like: Digital‑only (or near‑only) operations: mobile apps, web portals; minimal or no physical branches. Fewer legacy systems, branch overheads and manual processes. Focus on user onboarding experience, real‑time notifications, simplified user interface, often gamification or budgeting tools. Partnerships and third‑party infrastructure: many rely on licensed banks (for deposit taking) or Banking as a Service (BaaS) platforms rather than building full banking back‑end in house. Monetization strategies such as interchange fees (on debit cards), subscription/premium services, lending or credit, currency services, and embedded finance offerings. Targeting either under‑served segments (younger users, gig economy, under‑banked countries) or offering al