Real-Time Communication and the Rise of Neobanks

Neobanks are a new hot topic today. They have been around for only a decade but have already gained enough popularity which keeps growing. The global neobank market size reached almost 47 billion US dollars in 2021. In the US alone, there were 14.4 million neobank account holders in 2020. Neobanks are clearly on an upward trend.

What is a neobank?

Technically speaking, despite having “bank” in their name, they are not banks as such. Neobanks are, in fact, smartphone apps offering basic financial services to their users. They operate purely online, have no brick-and-mortar offices or physical infrastructure, and are not related to major banks or financial institutions.

Simply speaking, neobanks are digital products based on technology allowing users to perform such operations as opening and managing savings accounts, making payments and money transfers. Mostly, neobanks do not issue loans or credits and they need to partner with “physical” banks to support cash withdrawals, which is usually at a fee.

However, on the pro side, the digital-only nature of neobanks allows them to cut costs to the minimum which results in lower fees for their customers.

Who are neobanks for?

Neobanks, which are often referred to as “online banks” or “digital banks”, are a true boom with young, technology-savvy people who seem to never let go of their smartphones. They prefer to do all their business on the go and have mobile apps for everything.

For such users, a banking app is just the thing. They want to be free in their financial activities, not bound by opening hours, time zones, and national holidays. A neobank app is there for them 24/7, with all usual procedures being much more convenient and less time-consuming. The technologies implemented in neobank apps allow them to speed up many evaluation and verification procedures which can take longer in traditional banks.

Such ease and convenience make this new solution so attractive that people are prepared to accept certain drawbacks, such as a limited range of services or the inability to contact a “live” agent.

Communication with neobanks

As neobanks are digital-only banks and have no physical branches or call centers, users can contact them only via chat. Dominic Pym, co-founder of Up neobank, confirmed it in no uncertain terms: “The only way to interact with a human at Up is using the app, with a team replying using emojis and animated GIFs. All the kids love their mobile phones and talk to each other via chat, so they love it.”

Even though neobanks exist only in the digital universe, many of them still maintain support teams to assist customers. Such teams are available in a live chat right within a banking app, thus, users can get help as quickly and conveniently as they do the rest of their financial operations.

Often, live chat is complemented with a chatbot assisting neobank users with basic financial tasks. Through a chatbot, users can get answers to the most frequent questions as well as perform transactions, for example, manage their accounts or make transfers.

How neobanks benefit from live chat

Live chat is being increasingly adopted by businesses in many industries, due to its convenience and speed. However, for neobanks, live chat offers some additional benefits.

Live chat is popular with neobank’s target audience

As we mentioned before, the majority of neobank users are millennials who grew up surrounded by developing technology and are comfortable with it. 89% of millennials prefer to do business via chat, and neobanks offer just that.

Busy and mobile people, neobank customers appreciate the quickness and convenience of live chat where they can get assistance and do their banking transactions, all during their morning commute or while waiting for their lunch order. The availability of live chat is another attractive feature of neobanks bringing them more customers.

Live chat reduces costs

One of the neobank features that attract users is lower fees for the supported digital services. Usually, their banking products are not as expensive as similar products of traditional banks. Neobanks can afford to lower their fees mostly due to simpler regulatory procedures and the absence of credit operations and related risks.

However, operational costs play their role, too. With no physical branches, neobanks do not need to face the expenses of their organization and maintenance. The same refers to support teams, too. When the team only works online via chat with no physical call center or office, its costs are lower.

A chatbot can reduce costs even further. It can take over repetitive tasks freeing agents for more complex issues and thus allow neobanks to maintain smaller teams.

Live chat increases customer satisfaction

Among communication channels, chat has the highest satisfaction rate – 82% of customers gain a positive experience from live chat. Such a high rate is due to the short response time and convenience of communication, which other channels cannot provide. These factors are especially important for neobank customers.

How does neobank chat create such a great banking experience? Chat has multiple advantages that contribute to making customers happy:

• In-app implementation. Customers do not need to switch between apps to reach the support team.
• Short response time. On average, it takes about 46 seconds for a chat to be answered by an agent.
• Communication with corresponding subject-matter experts. A chatbot or a short form at the beginning of the chat helps customers to specify their issue and get connected to the agent having the relevant experience.
• Typing indicators. When the customers see that the agent is typing, they feel supported and can expect that their issue is going to be resolved soon.
• Ability to save the chat. The customer can save the whole chat with a support agent for future reference or as proof of the neobank’s commitments.

What can QuickBlox offer to neobanks?

QuickBlox has created a full-featured, highly customizable chat solution that can be easily integrated into your app. It was specially designed for use in finance and banking and, therefore, takes into account all the requirements of the banking industry.

QuickBlox chat is available as a set of APIs and SDKs allowing chat to be implemented seamlessly in any neobank app. It is a multi-platform solution with a full range of mobile SDKs, which makes QuickBlox chat especially suitable for neobanks working as mobile apps.

Communication solutions designed by QuickBlox are highly secure and compliant with all the applicable regulations. They are safe to be used in industries handling massive amounts of sensitive data, such as banking and finance.

The chat by QuickBlox supports multiple customization options, thus it can be configured with the neobank’s distinct style and branding to become an organic part of its product. QuickBlox chat can enhance any neobank’s offering and create stunning customer experiences, which, in turn, result in higher customer loyalty.

For details on QuickBlox communication solutions or consultation on implementing live chat in your banking app, contact us. Our team will be happy to find the best solution for you!