Neobanks are on the rise: Can legacy banks keep pace?
Neobanks have shaken up the banking status quo since the introduction of PSD1 and PSD2, tempting customers in with user-friendly interfaces and streamlined processes. Legacy banks have struggled to keep up with the pace of innovation in the sector, and as a result, the industry is littered with rushed digital offerings that exacerbate the feeling that neobanks are pulling ahead in the digital transformation race.
In this day and age, having a low-quality digital banking platform is enough to turn customers away in favor of the digitally proficient neobanks. Customer loyalty doesn’t hold as fast as it once did, and customers are far more aware of the alternative services available to them at challenger digital banks. The traditional incumbents can’t continue to hope that their history and experience will win out as customers continue to experience low-quality customer service and deficient digital banking services.