Banking

Neo banking apps: How to benefit from them

Read more at www.financialexpress.com

With the analytics option, the users get a complete breakdown of their spends, savings, how much they stayed within the budget and what they can do best, etc.

For the last few years, home-grown Fintech startups have been achieving new peaks with enhanced technology and digital-oriented business models. Experts say the most popular ones are the ones that help individuals with their financial transactions such as mobile payments, stock trading, digital lending, insurance, blockchain technology, budgeting, instant credit, etc. According to industry data, various fintech startups have performed exceedingly well in 2020, despite the pandemic, and hold a promising future in 2021. For instance, start-ups like Vivifi, Cred, Finology, Finin, etc. have been helping customers with handling their financial services.

For instance, Finin, an AI-powered neo banking startup offers personalized banking solutions to its users. The startup uses AI to analyze the spending of customers, thereby generating reports that give insights on their spending and saving behaviour. The platform offers a complete view of users’ money, coupled with recommendations that will help the user to save more, make wiser spends, smarter investments, as well as understand his/her financial habits better and further improve them.

Suman Gandham, Founder and CEO, Finin, says, “You’ve always imagined what it would be like if you could avail your banking services without having to wait in queues or your cheque bouncing due to a slight modification of your signature. Neobanks have turned that dream into a reality to offer more than what traditional banks have by hyper-personalising their services to fit your lifestyle.”

He further adds, “Managing your finances has never been easier. When two people live different lifestyles, why should financial solutions be the same? Banks give you advice (when they do) based on your income and age. However, neo-banks provide solutions based on your lifestyle.”

For example, Rahul – a freelancer – earns a cumulative ranging between Rs 30,000-50,000 per month, but sporadically only upon completion of projects. With the help of a neo banking app like Finin, he will have his funds sorted out in the form of emergency funds using goals to ensure that he does not depend on his income to pay monthly fixed bills. The neo banking app will also help him identify the best investment plans and loan options for him if needed. With the budgeting feature, he will be able to keep a tab of his monthly expenses with categorisation to understand his spends and how he can optimise them. Rahul will also be given insights into how much he can save and how much he can invest on the basis of his income value despite fixed bill payments. He will also get notifications and reminders daily and weekly reminding him to pay his dues to avoid unnecessary fees deductions, trial subscription cancellation, refund tracking to help him save on a daily basis.’

To ensure security and privacy, most of these startups also use bank-level security, anti-fraud, and encryption systems to protect their customers’ information and prevent unauthorized usage. Some of these start-ups also offer multiple service options through their apps, such as Finin which along with a savings neo banking system offers multiple finance management features in one app allowing its users to do multiple finance management activities all in one place.

Here is how you will benefit from a neo-banking app;

Linking all your bank accounts in one app: They will let you link all your bank accounts and credit cards in one app and you will be able to access and manage your transaction history and balances. Gandham says, “One gets to view all of their money on one app and also gets a bird’s eye view of all their finances.”

Reminders and Notifications: These apps like most others also sends notifications along with reminders about pending bill payments, trial subscription cancellation alerts, and to track a refund that is due to another merchant.

Analytics through the app: With the analytics option, the users get a complete breakdown of their spends, savings, how much they stayed within the budget and what they can do best, etc.

Emergency Funds: Some of the neo banking apps also lets one create a pool as an emergency fund, with goal-based savings. One can create a goal for anything such as a phone, car, home, new set of headphones, etc. and on a weekly or monthly basis save towards it. Gandham, says “FDs, RDs, and investments aside, this will educate people that emergency funds and goals can be accomplished by simply disciplining oneself towards setting it aside as frequently as possible.”

Budgeting: Some also offers a budgeting option to help a user break their monthly spends into as detailed levels as they desire.

Bill payments: Most apps, starting from banking apps to digital payment apps, bill payment system has been added which nudges the user and allows them to pay all their bills in one place, also setup auto deductions and even get reminded few days in advance so that a user accrues no late fees.

As of now, most of these fintech start-ups are free to use without any hidden charges.

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