Neobanking to gain as digital natives shun bank branches

Going to a bank for any of its services might soon become a thing of the past.

Millennials, familiar with the internet from an early age, are increasingly growing comfortable with the idea of neo-banks, or online-only banks without a physical presence, boosting the prospects of such banks in India.

The neo-banking market in the world’s second-most populous nation is expected to grow at a three-year compounded annual growth rate (CAGR) of 50.5% to reach $11.65 billion by FY2025, according to a Grant Thornton Bharat report released on Monday.

“The Indian neobanking market is set for rapid expansion driven by the outreach to customers from the NTB (new-to-bank), SME (Small and Medium Enterprises) and salaried segments,” according to Jaikrishnan G, Partner, Financial Services Consulting, Grant Thornton Bharat.