Search Results (3)

The banking sector is experiencing significant disruption due to technological advancements and evolving customer demand. This study analysed over 2000 banking and/or neobanking users across 28 countries. A multinomial logit model was applied to examine three user characteristics groups: demographics, banking habits, and neobanking habits. Several interesting effects were found. Higher-educated and single users are more likely to use neobanks, while self-employed and lower-income users are less likely. Neobank users prioritize affordability, availability, and speed, while traditional bank users prioritize stability and personal interaction. We have developed a tool to identify clients likely to leave traditional banks, fully or partially, with high reliability. Even partial outflows mean banks lose important services generating significant revenue to competitors. A crucial factor here is the single banking market, which eases switching between banks. Neobanks further reduce barriers, enhancing customer mobility. Moreover, opening an account with a neobank takes only minutes. The findings of this study provide valuable insights for banks and neobanks, allowing for a more comprehensive understanding of users’ characteristics that reflects current customer demand and enables new strategies to better address them. Full article

Changes in customer behaviors after the COVID-19 pandemic have encouraged the transformation of banking systems. Neobanks have emerged as an innovation and entered the banking system to compete with traditional banks by offering new customer experiences. Neobanks transform traditional banking products and services which are delivered through physical interactions into those delivered via digital channels. This paper analyzes traditional banks that have transformed into neobanks, specifically their efficiency after digital transformation. Efficiency was measured using Stochastic Frontier Analysis (SFA), as it is highly accurate in estimating efficiency scores. This study also used a Pooled Mean Group (PMG) estimation of the Panel ARDL (Autoregressive Distributed Lag), as this approach is useful for analyzing the relationship between variables in panel data, to investigate digital transformation as a determinant of neobanks’ efficiency and examine the existence of short-term and long-term relationships between digital transformation and efficiency. We found that the efficiency of neobanks increases after digital transformation. Furthermore, it can be concluded that digital transformation is a determinant of efficiency and that there is long-term relationship between digital transformation and efficiency. In the short term, digital transformation has a significant negative correlation with efficiency, but in the long term, it has a significant positive relationship; this is because the cost of digital transformation initially decreases the profit efficiency, but afterwards, it increases the efficiency. Full article

This article assesses the opportunities and challenges for different categories of FinTechs in the SAARC and ASEAN regions. We consider the global financial inclusion data released by the World Bank and map the responses to gain insights into the opportunities and challenges for FinTechs in the respective regions. We develop a new index, termed the FinTech Opportunity Index (FOI), to conceptualise the opportunities and barriers based on individual savings, borrowings, purchasing behaviour, and payment preferences. We note that FinTech services have potential opportunities for expansion in the ASEAN regions but less so in the SAARC regions. The need for different types of FinTech services varies between regions. Services such as crowdfunding, neobanks, and InsurTech have potential in the ASEAN regions, especially with the positive attitude towards entrepreneurship and asset investments. In the SAARC regions, InsurTechs linked to health care has potential along with LendTechs and neobanks. We further note that males, and the young are more likely adopters of FinTechs in both regions. The analysis suggests the need for innovative promotions and education to motivate the more sceptical, especially women and the elderly population, to adopt FinTech services. Full article