SMART BANKING, SMARTER CUSTOMERS: THE NEO BANK IMPACT

Abstract

The evolution of financial technology in the global market has caused a huge change in the global banking ecosystem, marking the birth of the neobanks – digital only services which provides its services exclusively through online platforms. This study explores the impact of neobanks and digital financial services (DFS) based on the customers perception, trust, and adoption with a focus on the Indian market from the primary data collected through conducting a survey on 100 samples for the study, and it highlights how the neobanks are perceived as convenient, cost effective, and technologically advanced , which offers a flawless mobile experience making it easy for using the digital platforms, transparent fee structures , and innovative features like real time alerts and spending analysis. The youngsters, digitally literate customers show strong preference for using the neobanks, while their major concerns around data security, regulatory safeguards, and lack of physical branches temper the overall trust levels among the users. Review of literature findings enhance that neobanks are reshaping banking by highlighting the efficiency, inclusion, and customer oriented, though challenges of profitability, regulation, and cybersecurity persist. The study concludes that the neobanks do not replace the traditional banks but rather they complement the additional financial system pointing towards a hybrid model that combines the digital agility with the trust, reliability, and stability. Sustainable growth of neo banks will depend on enhancing security, regulatory transparency, and customer literacy, while the policy maker and the financial institution must encourage innovation without compromising customers trust and confidence.