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What is a Neobank and what are the popular ones in Singapore?

Apr 05, 2024

Neobanks, a revolutionary development in the financial landscape, are digital-only banks that offer seamless and user-centric banking experiences without physical branches.

In Singapore, this innovative concept has gained significant traction, transforming the way people manage their finances. Neobanks provide user-friendly interfaces, convenient access, and often low fees.

As Singapore embraces digital finance, these modern banks continue to disrupt the traditional banking landscape by appealing to tech-savvy consumers seeking efficient, modern banking solutions.

However, before you navigate the neobanking world you first need to know what is neobanks.

What is a Neobank?

A Neobank is a type of financial institution that operates exclusively in the digital space, without any physical branches. Unlike traditional banks, Neobanks deliver its services through mobile apps and online platforms, offering a user-friendly and streamlined banking experience.

They often leverage advanced technology, data analytics, and artificial intelligence to provide personalized financial solutions to customers.

Neobanks typically focus on convenience, cost-effectiveness, and innovative features, making them appealing alternatives for individuals seeking modern, flexible, and efficient ways to manage their finances.

As pioneers in the fintech industry, Neobanks are challenging the traditional banking model and reshaping the future of banking services. In today’s world, it has become increasingly important to be aware of what is neobanks.

How does a Neobank work?

Neobanks operate as digital-only financial institutions, utilizing cutting-edge technology to provide a range of banking services without physical branches.

Customers can access their accounts, make transactions, and manage finances through user-friendly mobile apps or online platforms. These banks often prioritize speed, simplicity, and transparency in their processes.

Leveraging data analytics and AI, Neobanks offer personalized financial insights and budgeting tools to help users make informed decisions.

They also tend to have lower operating costs compared to traditional banks, allowing them to offer competitive interest rates and fewer fees.

Additionally, Neobanks partner with other fintech companies to expand their service offerings, such as investment options and insurance products, creating a holistic and customer-centric banking experience for tech-savvy individuals.

How do Neobanks differ from traditional banks?

1. Digital presence

A primary distinction between Neobanks and traditional banks lies in their mode of operation.

While Neobanks function solely in the digital realm, accessible through mobile apps and online platforms, traditional banks operate with a physical branch network alongside their digital services.

2. Cost structure

The cost structure sets Neobanks apart from their traditional counterparts.

Neobanks enjoy cost advantages due to their lack of physical branches, enabling them to offer more competitive interest rates on savings accounts and reduced fees for various banking services.

3. User experience

Neobanks excel in providing a seamless and user-friendly experience.

Leveraging cutting-edge technology, they offer intuitive interfaces, real-time updates, and instant customer support, elevating the efficiency and convenience of banking for users.

4. Product offering

The product offering distinguishes Neobanks from traditional banks.

While traditional banks present a wide array of financial products and services, Neobanks may focus on core banking services, often streamlined with a digital-first approach, though they may still offer some additional products.

This unique offering is key to understanding what is neobanks.

5. Personalization

Neobanks often use data analytics and AI to deliver personalized financial insights and recommendations to customers, tailoring their services to individual needs.

Traditional banks may have personalized services, but Neobanks excel in this area due to their advanced technological capabilities.

6. Regulatory compliance

Both Neobanks and traditional banks are subject to banking regulations, but Neobanks may face additional challenges in complying with financial regulations, especially when operating in multiple countries.

7. Partnerships

Of the various markets, Neobanks Singapore has frequently collaborated with various fintech companies to expand their offerings beyond traditional banking, providing customers with a broader range of services like investment options, insurance products, and budgeting tools.

What are the importances of Neobanking for businesses?

1. Simplified account management

Neobanks offer businesses a user-friendly and streamlined approach to account management.

Through intuitive mobile apps and online platforms, companies can effortlessly monitor transactions, check balances, and initiate payments, reducing the administrative burden and facilitating better financial decision-making.

2. Cost savings

Neobanks operate without the overhead costs of maintaining physical branches, enabling them to provide cost-effective banking solutions.

Businesses can benefit from lower fees, competitive exchange rates, and reduced transaction charges, leading to significant cost savings in their financial operations.

3. Enhanced efficiency and automation

With neobanking, businesses can leverage automation tools for various financial tasks.

Routine processes like invoicing, expense tracking, and payroll management can be automated, freeing up valuable time and resources, and allowing companies to focus on core business activities.

Also check out our article on business expense management automation to discover the benefits of automation and how to implement automation in your organization.

4. Flexible payment solutions

Neobanks offer flexible and convenient payment solutions tailored to business needs.

Whether it's facilitating online payments, providing virtual cards for online transactions, or enabling contactless payments, these innovative solutions enhance cash flow and payment efficiency.

5. Integrated financial services

Neobanks frequently partner with various fintech firms, establishing interconnected networks that provide comprehensive financial services.

Through a single platform, businesses can avail themselves of a diverse array of offerings, encompassing investment opportunities, insurance packages, and even borrowing facilities.

This collaborative approach ensures that companies can conveniently access a broad spectrum of financial solutions within a unified ecosystem.

6. Agility and innovation

Neobanks thrive on innovation, continuously introducing new features and services. For businesses, this means access to cutting-edge financial tools and technologies that keep them ahead of the curve in an ever-evolving market landscape.

7. Seamless international operations

Neobanks are designed with global reach in mind.

They provide businesses with multi-currency accounts, favorable forex rates, and simplified international payments, facilitating seamless cross-border transactions and expanding their global market presence.

8. Access to business tools and integrations

Neobanks often offer a marketplace of business tools and integrations.

These tools can include accounting software, expense management systems, and customer relationship management platforms, providing businesses with a holistic ecosystem to optimize their financial operations.

How do Neobank make money?

Interchange fees

Neobanks earn a portion of the interchange fees charged on debit and credit card transactions made by their customers.

Deposit and lending interest

By lending out customer deposits at a higher interest rate than what they pay on deposits, neobanks profit from the interest spread.

Subscription fees

Some neobanks offer premium features or services for a subscription fee, creating an additional revenue stream.

Foreign exchange fees

Neobanks often charge fees for currency conversion, especially for international transactions.

Partnership commissions

Collaborating with other fintech companies and offering their services to customers may earn neobanks commissions or referral fees.

Data monetization

Aggregated and anonymized customer data can be sold to third-party companies for market research and targeted advertising, generating revenue for neobanks.

What are the important features and services of Neobanks?


Digital account opening

Neobanks have revolutionized the account opening process by enabling customers to open an account entirely online.

Through a streamlined and user-friendly interface, individuals can submit their information, verify their identity, and receive a new account without the need to visit a physical branch. This seamless digital onboarding experience simplifies the initial steps of becoming a customer.


Mobile banking apps

Central to the Neobank experience are mobile banking apps, which serve as the primary interface for customers to manage their finances.

These apps provide comprehensive functionality, allowing users to check balances, review transactions, transfer funds, and perform various banking operations on the go. The intuitive design and real-time updates enhance the overall user experience.


Contactless payments and digital wallets

Neobanks embrace the trend of contactless payments and digital wallets, making it effortless for customers to make transactions using their smartphones or wearable devices.

Whether through Near Field Communication (NFC) or QR codes, these secure and convenient payment methods have become increasingly popular in daily transactions.


Money transfers and remittances

Neobanks have disrupted the traditional remittance landscape by offering cost-effective and swift international money transfers.

Leveraging innovative technologies, such as blockchain, they reduce transfer fees and processing times, benefitting businesses and individuals with international financial needs.


Expense tracking tools

Neobanks Singapore provide sophisticated budgeting and expense tracking tools.

Users can categorize and monitor their spending, set financial goals, and receive insights into their financial habits, helping them make informed decisions and achieve financial objectives.


Multi-currency accounts

For those engaged in global business or travel, Neobanks often offer multi-currency accounts.

These accounts allow users to hold and transact in various currencies without incurring unfavorable exchange rates, streamlining international transactions and reducing foreign exchange costs.


Savings and investment options

Neobanks extend banking services, providing users with savings and investment options.

Customers can set up automated savings plans, invest in diversified portfolios, or participate in digital asset trading, empowering them to grow their wealth and achieve financial goals.


Customer support and service

Despite their digital nature, Neobanks prioritize customer support and service.

Through in-app chats, emails, or phone support, users can easily access assistance and resolve any banking-related queries. Personalized and responsive customer service ensures a positive experience for clients.

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What are the popular Neobanks in Singapore?

1. Aspire

Aspire, a neobank tailored for small and medium-sized enterprises (SMEs) in Singapore, provides a streamlined account opening experience, eliminating the need for tedious paperwork.

Through its mobile app, Aspire empowers entrepreneurs with real-time expense monitoring, automated bookkeeping, and valuable insights into their cash flow.

Notably, the platform offers a distinctive feature - the creation of virtual corporate cards - facilitating efficient management of employee expenses.

Aspire's overarching mission is to bolster SME growth by equipping them with essential tools and financial services, thus enabling success in the ever-evolving business landscape.

2. Wise (formerly TransferWise)

Wise is a global neobank that has gained popularity in Singapore for its cost-effective international money transfer services, it has almost become a staple answer for what is neobanks.

The platform's borderless account allows users to hold and manage multiple currencies, avoiding excessive conversion fees. With Wise, customers can send and receive money internationally with transparency on exchange rates and low transfer fees.

The Wise debit card further enhances its offering, enabling users to spend money abroad at interbank exchange rates.

By disrupting traditional remittance services, Wise has become a preferred choice for individuals and businesses seeking efficient and affordable cross-border transactions.

3. YouTrip

YouTrip is a neobank catering to travelers in Singapore, offering a multi-currency mobile wallet. The platform allows users to exchange and spend money overseas with no added fees at wholesale exchange rates.

YouTrip's mobile app provides real-time currency conversion and supports over 150 currencies globally. It also offers features for budgeting and expense tracking, helping travelers manage their finances while on the move.

YouTrip's focus on cost-effective and hassle-free foreign currency spending has made it a popular choice for frequent travelers and those who frequently engage in cross-border online shopping.

4. Revolut

Revolut is a UK-based neobank that has rapidly expanded its services to Singapore and other international markets.

The platform provides a range of financial services, including multi-currency accounts, international money transfers, budgeting tools, and cryptocurrency trading.

Revolut's app allows users to spend money abroad at interbank exchange rates with no hidden fees. Additionally, the neobank offers features like round-up savings, allowing users to round up transactions and save spare change.

Its extensive offering, including premium subscription plans with added benefits, has attracted a diverse customer base, making it one of the most recognizable neobanks in Singapore.

What are the advantages of Neobanks?

1. Easy account creation

Neobanks excel in providing a hassle-free account opening process. With minimal paperwork and simplified digital onboarding, customers can establish accounts swiftly, avoiding the tedious procedures associated with traditional banks.

2. Good and easy-to-use interface

Neobanks prioritize user experience, offering intuitive and user-friendly mobile apps and online platforms. The sleek interfaces enhance navigation and functionality, making banking tasks more accessible and enjoyable for customers.

3. Low operational costs

Operating without physical branches significantly reduces neobanks' overhead costs.

As a result, they can offer more competitive interest rates on savings accounts and provide various services with lower or no fees, benefiting customers and businesses alike.

4. Quick and easy international payments

Neobanks leverage technology to expedite international money transfers. By partnering with cross-border payment providers or using blockchain technology, they offer faster and more cost-effective solutions for global transactions.

5. Easy adjustment to customer needs

Neobanks are agile and responsive to customer feedback. They can swiftly adapt their services and features to cater to evolving customer needs and preferences, ensuring that their offerings remain relevant and valuable.

6. Speed and efficiency

Digital banking eliminates the need for physical paperwork and long processing times, allowing neobanks to conduct transactions quickly and efficiently. Customers can perform banking tasks with just a few taps on their mobile devices.

7. Innovative features and financial tools

Neobanks stand out for their innovative approach to financial services.

They introduce cutting-edge features, such as automated savings plans, personalized spending insights, and round-up savings, empowering users to manage their finances proactively.

8. Integration with fintech services

Neobanks often integrate with various fintech services, expanding their offerings beyond traditional banking.

Customers can access investment options, insurance products, and other value-added services within the same platform, creating a comprehensive and seamless financial ecosystem.

Knowing these advantages is an important part of understanding what is neobanks.

Challenges and risks associated with Neobanks

Regulatory and compliance issues

Neobanks face intricate and ever-changing regulatory environments, bound by stringent financial rules.

Meeting anti-money laundering (AML) and know-your-customer (KYC) obligations, along with acquiring essential licenses, poses challenging and time-consuming tasks for these digital banks.

Security concerns and cybersecurity risks

As digital entities, neobanks are vulnerable to cybersecurity threats, including data breaches, phishing attacks, and identity theft.

Safeguarding sensitive customer information and funds is crucial, and any security lapse can lead to reputational damage and loss of trust.

Limited physical presence and cash handling

Neobanks' lack of physical branches poses challenges for customers who prefer in-person banking or need cash-related services. While they offer convenience, customers may face limitations in depositing or withdrawing cash.

Potential service disruptions and downtimes

Being reliant on technology, neobanks are susceptible to technical glitches, outages, and service disruptions.

Such incidents can hinder customer access to their accounts and transactions, causing frustration and dissatisfaction. Understanding these challenges and risks is also a part of understanding what is neobanks.

Current market trends of Neobank

1. Global expansion

Neobanks are increasingly expanding their services to international markets, aiming to tap into new customer bases and cater to the needs of a broader audience. This trend reflects their ambition to become significant players in the global financial landscape.

2. Partnerships and collaborations

Neobanks are forming partnerships and collaborations with various fintech companies and traditional financial institutions.

These alliances allow them to offer a more extensive range of services, including investment options, insurance products, and lending solutions, enhancing their value proposition.

3. Integration of cryptocurrencies

Some neobanks are incorporating cryptocurrencies into their platforms, allowing customers to buy, sell, and hold digital assets. This integration reflects the growing interest in cryptocurrencies and blockchain technology.

4. Sustainability and ESG focus

Several neobanks are emphasizing environmental, social, and governance (ESG) considerations, aligning their services with sustainable practices. This trend reflects the increasing demand for ethical and responsible banking solutions.

5. Personalization and data-driven services

Neobanks are leveraging customer data and artificial intelligence to provide personalized financial insights and tailored offerings. By understanding individual needs better, they can offer more relevant and targeted services to their users.

6. Offline services and physical cards

While primarily digital, some neobanks are exploring offline services, such as issuing physical debit cards. These offerings cater to customers who prefer traditional banking elements alongside digital convenience.

7. Regulation and compliance focus

As neobanks grow in prominence, regulatory scrutiny is increasing. Compliance with financial regulations and security measures is becoming a primary focus to maintain customer trust and meet regulatory standards.

Future of Neobanking

The future of neobanking appears promising; poised to reshape the financial landscape, knowing what is neobanks has become nearly compulsory.

As technology advances and customer preferences evolve, neobanks are set to play a significant role in the banking industry.

Key aspects defining the future of neobanking include market consolidation through acquisitions and partnerships, enhanced personalization using data analytics and AI, and global expansion into new markets.

Neobanks will also strengthen its ecosystem integration, offering customers a comprehensive range of financial services. Additionally, a focus on environmental, social, and governance (ESG) considerations is expected, aligning with the growing demand for sustainable banking options.

Collaboration with traditional banks to combine agility with established infrastructure is another future trend.

As regulators adapt to neobanks' growing prominence, tailored regulations will ensure consumer protection and system stability, fostering a conducive environment for neobanks to thrive responsibly.

Overall, neobanking promises a customer-centric, tech-driven, and dynamic financial landscape, challenging traditional banking norms and offering innovative solutions for managing finances.

Key considerations while choosing Neobanks for your business

1. Understanding business needs

Before choosing a neobank, assess your business's specific financial requirements.

Consider factors such as transaction volume, international payments, expense management, and cash flow needs. Opt for a neobank that aligns with your business model and offers relevant features and services.

2. Reputation and trustworthiness of the Neobanks

Assess the credibility and reliability of the neobanks in consideration. Investigate customer reviews, industry standing, and satisfaction levels. Choosing a reputable neobank with a proven track record instills confidence and assurance in its services.

3. Compliance and regulatory standards

Ensure that the neobank adheres to robust compliance and regulatory standards. Check if they are licensed by relevant financial authorities and follow anti-money laundering (AML) and know-your-customer (KYC) protocols.

Compliance with financial regulations demonstrates their commitment to security and transparency.

4. Account types and pricing structure

Examine the types of business accounts offered by neobanks and the associated pricing structure.

Compare fees for transactions, international payments, and other services. Choose a neobank that offers transparent and competitive pricing, aligning with your business's financial needs.

5. User experience and interface

A seamless and user-friendly interface is essential for efficient financial management. Evaluate the neobank's mobile app or online platform for ease of use, navigation, and functionality. An intuitive user experience contributes to smoother banking operations.

6. Security and privacy measures

Evaluate the neobank's efforts to ensure data security.

Verify if they implement robust security measures, like encryption and multi-factor authentication, to safeguard sensitive information. Additionally, review their privacy policy to understand their approach to handling and sharing customer data.

7. Integration with third-party apps and services

Consider the neobank's ability to integrate with third-party apps and services. Seamless integration with accounting software, payment gateways, and other fintech tools can streamline financial processes and enhance overall efficiency.

8. Customer support and service

Assess the quality and availability of customer support. A reliable neobank should offer accessible and responsive customer service through various channels. Prompt assistance and support are vital, especially during critical financial situations.

Volopay - all-in-one financial solution for businesses

Volopay is a prominent financial technology company that specializes in providing business accounts and expense management solution tailored for modern enterprises.

Volopay offers a comprehensive suite of features to streamline financial operations for businesses. First, their platform allows real-time expense tracking, enabling employees to manage and categorize expenses effortlessly through a user-friendly mobile app.

This feature simplifies the expense reporting process and enhances transparency.

Furthermore, Volopay provides virtual corporate cards to employees, facilitating secure online and offline transactions. Businesses can set spending limits and exercise control over card usage, ensuring financial discipline.

Another key aspect of Volopay's offering is automated bookkeeping, which optimizes financial management for businesses.

Seamless integrations with accounting software ensure that transactions are accurately recorded, reducing manual work and improving efficiency.

For companies operating globally, Volopay's multi-currency accounts are especially beneficial. These accounts enable businesses to perform transactions in various currencies at competitive exchange rates, minimizing foreign exchange costs.

Additionally, Volopay's expense policies are customizable, allowing companies to set spending guidelines according to their unique requirements. This helps enforce compliance and financial responsibility among employees.

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What is Neobank vs Digibank?

Neobank is a digital-only bank without physical branches, while Digibank refers to a bank with a digital presence, but still maintains physical branches.

What is a neobank vs fintech?

Neobank is a digital bank that operates entirely online, while fintech refers to technology-driven financial services companies, which can include neobanks but also other financial technology firms.

Are neobanks risky?

Neobanks can carry certain risks, such as cybersecurity threats and regulatory challenges, but they also provide benefits like convenience and cost-effectiveness.

Are neobanks the future of banking?

Neobanks are considered a significant part of the future of banking, as they offer innovative solutions and customer-centric services leveraging technology.

Is Volopay a neobank?

Volopay is not a neobank. It is a financial technology company that provides business expense management solutions and corporate cards.

What are the special features of Volopay?

The special features of Volopay include expense tracking, physical and virtual corporate cards for employees, automated bookkeeping, and integration with accounting software, offering a comprehensive financial management solution for businesses.