The Neo banking industry had been in its infancy phase for 6 years in India. But the market picked up the pace during the pandemic with the entry of new players, and an increase in technology and internet penetration. Additionally, RBI and the government’s increased participation in the digitalization of payment mechanisms along with the introduction of UPI which has boosted the growth of the neo-banking industry.
1. India’s financial service sector is picking up pace due to a number of supportive factors that include a young population, high fin-tech adoption, and increasing internet penetration
2. With the current momentum in financial services, neo-banks are also proliferating in the country led by the emergence of new players in the Indian neo-banking segment
3. Even after showing robust growth, the neo-banks are yet to receive specific licenses or regulatory approvals in India
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4. In addition to rules and regulations, high acquisition cost, customer trust are some of the other barriers to the growth in the Neo banking industry
5. Still, the neo-banking segment is able to thrive in the Indian market due to the high adoption of Fin-Tech coupled with Lower Pricing and High User Experience
6. The Indian neo-banking sector is expected to grow at a CAGR of 9%. However, growth rate is expected to be stabilize in the coming years
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