Neo-banking and online banking are in full competition. They are part of the fintechs and offer similar solutions to the latter. However, there are some particularities between these two structures.
In the digital age, traditional banks have redoubled their efforts to cope with new emerging practices. This evolution is notably reflected in the arrival of neo-banks and online banks. These two structures have succeeded in making a place for themselves in the landscape of the banking sector. This article explains the difference between online banks and neo-banks.
In addition, discover the top 4 neo-banks (find out more in our dedicated comparison) :
- Orange Bank
As well as the top 4 online banks:
- Hello Bank
- B for Bank
Table of contents
Online banking: definition
An online bank benefits from theThe systematic support of a traditional bank. Indeed, even in the absence of a physical branch, it exploits an existing infrastructure to ensure a quality and dematerialized service. Thanks to this specificity, it offers its customers both the financial stability of a traditional bank and optimal pricing conditions.
Below are the 4 best online banks that exist on the web
Boursorama is one of the online banks the oldest of the market. It is presented as the most economical among banks. This has made it an undeniable success. Since its creation, it has had almost 2 million customers and remains the market leader. It therefore focuses its activities on very competitive rates linked to a multitude of services, just like the services offered in a banking institution.
2. Hello bank
Hello bank is a branch of BNP Paribas. It is one of the key players in online banking. It already has more than 450,000 customers to its credit. It explains this success in particular by its ability to position itself between online and physical banking services. Indeed, this bank allows its customers to directly access the portfolio of the BNP Paribas network.
Monabanq is undoubtedly among the innovative online banks of the moment. However, it does not benefit from the same media notoriety as its colleagues. The bank has strategically opted for the availability of its services. In addition, it attaches importance to the quality of its services in comparison with online banks whose prices are slightly higher.
4. B for Bank
Bforbank presents itself as a high-end online bank. It provides its customers with premium services to enable them to manage their money well. The company has been present in the online banking sector for 10 years and has gradually opened up to a wider public by making its general conditions more flexible. It has expanded its offer with Visa Classic.
A neo-bank is a financial institution with a banking license that is 100% cell phone based. It provides its basic services for free. To better distinguish it from online banking, find below the 4 major neo-banks that share the French market.
1. Orange Bank
Orange Bank was created to complement the existing Orange offer. Free and unconditionalIt is characterized by its services and its ease of access. This neo-bank offers its customers a wide range of products and services, including all the traditional banking formulas.
Opening an Orange Bank current account also translates into the possibility of benefiting from exclusive financing and savings services. As for the Premium card, it allows you to take advantage of unprecedented services such as cryptocurrencies, travel insurance, direct debits and free payments. Buying this product is therefore a real advantage for all those who want to benefit from a mobile subscription without being limited to the free packages.
N26 was officially launched in France in January 2017. Currently, it is established in 26 countries, including Europe and also the United States. This institution provides Internet users with a offer consisting of a free bank account entitled “N26 Standard”. This includes a virtual or physical Mastercard on demand, with no income requirements. In addition, it provides a range of services associated with payments. In particular, money and currency transfers between individuals, real-time card payments.
Revolut is one of the banking institutions accessible to the greatest number. It offers two MasterCard cards and one virtual card for each account. As stated in its general terms and conditions, there is no annual fee. You have to pay 6 euros to benefit from the services offered and direct debits are free up to 200 euros.
Above this threshold, a 2% commission is charged. Note that Revolut does not offer a checkbook or overdraft authorization.
Nickel was designed as a neo-bank accessible to all audiences and all budgets. The subscription to this account can be done from more than 4500 tobacco shops throughout France. Moreover, this account targets all categories from the simple student to the frequent traveler without forgetting the company accountants. For minors, it is even possible for them to subscribe to a Nickel account provided they have their parents’ authorization.
And as the annual subscription at Nickel costs 20 euros, it is a product adapted to all types of budget
Neo-banks or online banks: how they work
Although their name can be a confusing factor, their operation is different. The first thing to remember is that online banks are a “real” bank attached to a traditional bank.
In terms of the quality of their services, the systems they put in place and their technicality, they follow the principles of the traditional banks on which they depend. The neo-banks, on the other hand, are simply payment organizations.
These start-ups use new technologies to revolutionize the banking sector. They offer their users the possibility of control their finances easily and quickly. To summarize, neo-banking is a set of technologies providing maximum quality in all areas. Discover in detail the major characteristics of these two types of bank 2.0?
Neo-banks or online banks: status
Their status is the main characteristic that differentiates neo-banks from online banks. Indeed, online banks have a pure player status. They are all holders of European or French banking licenses authorizing them to offer their services in France.
In addition, this status allows you to benefit from the same guarantee conditions as those offered by traditional institutes. Consequently, the subscription to a Monabanq account benefits from the same protection as that granted by BNP Paribas. On the other hand, it should be noted that the sum insured by Boursorama Banque is 100,000 euros in the event of bankruptcy.
In addition, the majority of neo-banks do not have a banking license. They are merely payment institutions, but are subject to strict controls. As a result, customers do not benefit from any coverage like an online bank. However, neo-banks wishing to offer their services in France are subject to the approval of the ACPR or Autorité de contrôle prudentiel et de résolution.
Neo-banks or online banks: banking services
The divergence of products and services offered Another unavoidable difference between neo-banks and online banks is the difference in the products and services offered to customers.
Since online banks are profiled as real banks, most of their offers remain similar to those of traditional structures. For example, a current account, whether individual or joint, a checkbook, a bank card, savings, a stock exchange, credit and life insurance.
In addition, the customer has the possibility of close his current account to turn to an online bank. However, this possibility cannot be offered with a neo-bank since it cannot be used as a main account.
Its services are moreover limited:
- No joint account
- Systematic authorization cards only
- No checkbook
- No authorized overdraft
- No credit or savings offer
- No welcome bonus. The latter varies between 80 euros and 160 euros in online banks
As innovative as they are, the deposit of cash or checks is rarely possible within the neo-banks, while the online bank provides this service. In short, these two entities do not all cover the same expectations. While the online bank offers a wide range of products that perfectly fit the needs of its customers, the neo-bank is limited to the bank account. It provides few benefits.
Neo-banks or online banks: opening an account
As far as online banks are concerned, accounts are generally opened from a personal computer. On the other hand, with neo-banks everything is done on a smartphone same for customer service. As a whole, neo-banks facilitate the operation by also asking for much less documentation and supporting documents than online banks.
In any case, speed of use, simplicity of procedures, efficiency and flexibility are the key factors for these new kind of banks. It is a choice apart and a new vision, to always adapt to the needs and desires of customers …
Neo-banks or online banks: support for use
As mentioned earlier, online banking is intended to facilitate all banking procedures. A computer connected to the Internet is enough to create an account.
Over the years, they have exploited the advantages of new technologies. For example, they have developed an application to facilitate routine actions. In particular, the classification of expenses, the modification of ceilings, etc. Finally, they are becoming available both on mobile and PC, which is a delight for all user profiles.
As for the neo-banks, they tend to orient their offer towards mobile applications. For some, it is impossible to access them via a PC, as in the case of Revolut, a mobile banking institution.
As a result, users are required to have the latest mobile application.The latest generation of smartphone in order to have access to all the features offered. What also differs from the neo-bank and the online bank concerns the targeted clientele. Indeed, the first one targets a young and connected clientele, while the second one is aimed at a wider public.
Neo-banking or online banking: an exceptional case
Beyond their differences, there are some similarities between online banking and neo-banking. For example, they both offer a RIB. N26 has a European license to conduct banking business. It offers its customers the same service as traditional banks. However, it does not provide a checkbook or discovery facilities. As for Orange Bank, it has a banking license, but does not offer all the services of a real bank.
Similar management tools
For both online and neo-banking, maximum personalization of the customer experience is offered by innovative and intuitive management and monitoring tools, accessible via smartphone. In addition to consulting accounts, making transfers or setting up direct debits, most banks offer real-time alerts on account movements, instant transfers and card code changes.