Neobanks as a New Financial Architecture: Will Traditional Banks Disappear?

Tatiana Kostenkova, Professor at RANEPA, Russia

Traditionally, a bank was perceived as a symbol of stability and strength - a large building, complex infrastructure, well-established processes, and attentive service. It was an institution people turned to, trusted, and that visually and organizationally demonstrated its significance.

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Today, this model is rapidly becoming a thing of the past. Physical presence, architecture, personnel, and familiar forms of interaction are losing relevance. The question arises: can all of this truly be replaced by a digital interface on a smartphone - and if so, what remains of the very concept of a bank?

This transition cannot be unequivocally described as either a crisis or a breakthrough. Rather, it is a new reality in which familiar forms disappear and their functions are reinterpreted. And it is important to acknowledge: there will be no return to the previous model.

How a Neobank Differs from a Banking Ecosystem

Let us begin with the basics. It is important to distinguish between neobanks and banking ecosystems. To the uninitiated, they may appear identical: both have apps, marketplaces, delivery services, subscriptions, sleek interfaces, and discounts for every occasion. But the difference between them is roughly the same as between a startup and a corporation trying to “act like a startup.”

A neobank is a bank that was born digital and has never known any other existence. It never had marble offices, queues at service desks, or folders filled with stamped paperwork. It appeared directly as an app, a service, a product. A neobank does not reminisce about how “things used to be better,” because it simply had no “before.” It operates according to the logic of IT: it launches quickly, makes mistakes quickly, fixes them quickly, and moves on.

A banking ecosystem is a different story. It is a large traditional bank that at some point realized the world had changed and decided to change with it. It begins building services around itself: marketplaces, delivery, healthcare, education, taxi services - everything that can be neatly connected to the banking core. An ecosystem is an attempt to expand a conventional bank into a “super-app” without dismantling it entirely.

Put simply: a neobank was first a technology and then became a bank. A banking ecosystem was first a bank and then tried to become a technology.

A neobank is lightweight, fast, and sometimes bold. It does not worry about fitting a new product into an old organizational structure - it simply creates it. An ecosystem moves more cautiously: it must account for legacy systems, regulators, millions of customers, and complex internal mechanics. It is more powerful and larger in scale, but slower.

It is important to understand: ecosystems are not “bad,” and neobanks are not “good.” They are simply different stages of evolution. Ecosystems are a compromise between the past and the future. Neobanks are a forward-looking model without looking back. The market has already decided that both models will coexist - but with different roles.

Ecosystems will become large digital continents. Neobanks will serve as fast, intelligent navigators within the new financial reality. And perhaps it is the neobanks that will teach ecosystems how to live without the heavy legacy of the past.

Foto: Promo

When a Bank Stops Being a Bank

Not long ago, a bank was a place you had to visit - preferably during working hours, with a passport, documents, and patience. Its world consisted of branches, counters, stamps, and internal regulations that customers preferred not to know about. This model seemed immutable for decades - until smartphones appeared in people’s hands.

In recent years, it has become clear to many that a bank as an institution is no longer necessary. What is needed is a service - fast, intuitive, and preferably invisible. Financial operations have moved into mobile apps, user expectations have changed, and money itself has ceased to be an “event.” It simply has to work, without unnecessary steps or physical visits.

The modern bank no longer stands apart. It dissolves into everyday life and becomes a platform that combines finance with commerce, delivery, logistics, subscriptions, and business services. What matters is not the range of features, but how seamlessly users move between them. If everything works, the bank is invisible. If not, it becomes noticeable - and that is a bad sign.

The Neobank as a Living Organism

Neobanks fit especially naturally into this new reality. They did not “digitize branches” - they never had branches. They were born as applications and think like technologies. That is why they are often compared to living organisms.

A neobank has sensory systems - data, analytics, transactions, and user behavior. It has a nervous system - algorithms and machine learning that make decisions faster than any committee. It has organs - payments, lending, marketplaces, logistics, insurance, communications. And, of course, immunity - antifraud and cybersecurity, because in the digital world, survival without them is impossible.

As a result, a neobank reacts to market changes not “by regulation,” but situationally. Where a traditional bank needs months of approvals, a neobank may need weeks or even days. Speed becomes not just an advantage, but a condition for survival. In a world where users become accustomed to convenience within a day, slow decisions simply stop working.

A Banker Without Borders or Time Zones

The profession of banking itself is also changing. The bank of the future is no longer a network of branches, but a distributed team of people located across countries, time zones, and cultural contexts. Geography matters less than competence.

The modern banker increasingly resembles a product architect rather than a person behind a counter. This is an analyst, developer, data specialist, AI expert, and digital platform designer. The task is not to service processes, but to design a system that operates autonomously.

Thus, a bank increasingly resembles an IT company, while financial products become just one module within a larger digital structure. Money remains important, but no longer central. What matters most is how quickly, conveniently, and invisibly the bank integrates into people’s lives.

How the Market Is Already Reshaping

Looking at the global market, it is clear that neobanking is no longer a local experiment. In the United Kingdom, Monzo and Starling Bank live in the smartphones of millions and have long replaced “traditional” banks. In continental Europe, Revolut and N26 have turned banking apps into universal financial tools. In the United States, Chime is growing faster than many traditional players. It is proven: banks no longer need giant offices to be influential - a convenient interface, speed, and effective data use are enough.

Russia is not an exception, but rather a testing ground. Neobanking is developing particularly quickly - the market is large, users are demanding, and tolerance for inconvenience is declining. Several players already demonstrate what the financial sector will look like in the coming years.

T-Bank: A Bank That Never Became an Office

Tinkoff started as one of Russia’s first fully digital banks and challenged conventions from the beginning. It had no branches, but it had technology, analytics, and an understanding of how people actually use money. Around the banking core grew an entire environment: cards, loans, investments, business services, subscriptions, marketplace offerings, and loyalty programs. It proved that a bank can be fully digital and still scale.

Today, in Russia it operates under the brand T-Bank, while the model has gained new life abroad. In Mexico, a former team launched Plata - a branchless digital bank with cashback, installments, delivery, and a mobile app where everything happens in a few clicks. Rapid growth, hundreds of thousands of customers, and billion-dollar valuations show that the neobank model is universal.

Finstar: A Neobank Factory, Not Just an Investor

Finstar Financial Group demonstrates how one can participate in banking transformation without launching a bank. With assets of around $2 billion, the group operates at the intersection of finance and technology, investing in and launching fintech projects in more than 30 countries. Online lending, scoring, automation, and digital lending platforms - the building blocks of neobanks.

Finstar does not limit itself to passive investment. It acts as a production line: creating startups, restructuring companies, implementing technologies, and preparing projects for scaling. This approach shows fintech is no longer an experiment but a full-fledged industry.

Sber: When a Traditional Bank Becomes an Ecosystem

Sber is a special case. It is not a neobank, but an example of a traditional bank adapting by expanding into an ecosystem. Under Herman Gref’s leadership, services unrelated to banking emerged: e-commerce, delivery, telemedicine, education, insurance, cloud solutions.

The 2020 rebranding formalized this shift: Sber declared itself a technology company, with finance as only one function. The ecosystem now spans daily scenarios and has become a benchmark for the industry.

Kaspi Bank: When Banking Becomes the Background of Everyday Life

Kaspi is neither a pure neobank nor a traditional bank in the conventional sense. It is a rare case where a financial institution gradually and consistently accumulated services until it ultimately transformed into a fully-fledged super app. In Kazakhstan, Kaspi is not just a bank but a universal digital tool without which everyday life is difficult to imagine. About 13.5 million people use the application each month — a figure comparable to the majority of the country’s adult population. For many, it is the first app they open in the morning and the last they close in the evening.

Within a single interface, Kaspi integrates everything that is usually scattered across dozens of services: payments and transfers, loans and installment plans, online shopping, a marketplace, delivery, and business tools. Kaspi is designed so that users do not “go to the bank” — they simply live within the app, pay bills, make purchases, transfer money, and handle daily tasks without thinking about where finance ends and services begin.

Kaspi’s defining feature is that it has effectively become the country’s digital operating system. A significant share of payments and purchases flows through it, while thousands of entrepreneurs use the platform as their core infrastructure for commerce and payment acceptance. As a result, Kaspi has moved beyond being merely a financial service and has taken on the role of a central node in the economy — a clear example of how a bank can quietly evolve into the foundation of a nation’s digital life.

A Moment of Humor: When Your Neobank Knows Too Much About You

One of the surprises of neobanks is that they know us extremely well - sometimes even better than we know ourselves. While traditional banks quietly kept the secret of our overdrafts for years, digital banks behave differently: they do not judge, but they honestly reflect reality. And, as it turns out, not everyone is ready for that.

For example, the British neobank Monzo regularly reminds users how many times in a month they visited McDonald’s, Starbucks, or ordered delivery. Just dry analytics, no commentary. Yet that is precisely where the drama lies. Users began sharing screenshots: “19 McDonald’s transactions this month.” The caption: “I’m not ready for this level of honesty in a relationship.” Monzo said nothing — it simply looked users in the eye through data. And that proved more painful than any bank call.

The American neobank Chime also became a source of memes, albeit for more everyday reasons. On rare occasions, salaries arrived slightly later in the morning than usual — and the reactions followed. Users wrote on social media: “Chime, if you need coffee, just say so — I’ll wait for my paycheck.” Or: “My bank wakes up later than I do, but I still love it.” In a traditional bank, such a situation would have triggered a wave of formal complaints. In a neobank, it produced a stream of memes and friendly teasing. Because here, the bank is no longer a strict institution — it is almost a living character.

Sometimes neobanks even become part of family pedagogy. Monzo offers children’s cards, and parents began using them to teach financial literacy. But, as usual, children went further. They turned transfers into a real household role-playing economy: “Take out the trash — £1,” “Hug the cat — £0.50,” “Stay quiet for 10 minutes — priceless.” Parents thought they were teaching children about money, while the children built their own quest-based reward system. A payments app unexpectedly became a platform for family gamified capitalism.

All these stories may seem humorous, but they reveal something important. Neobanks have ceased to be faceless structures. They live alongside users, react to their habits, and become part of everyday life — sometimes too candid, sometimes unexpectedly human. And if a bank can become the subject of memes, then it has clearly stopped being just a bank.

Why the Bank in Your Smartphone Will Win

Traditional banks are not doomed because they are bad, but because they are too heavy. Their physical infrastructure — offices, branches, queues, large staff, and complex IT systems — made sense in the past, but in the digital economy it has turned into costly ballast. Maintaining it is becoming increasingly difficult, and explaining to users why they should travel to a branch is becoming even harder.

Against this backdrop, the bank in a smartphone appears strikingly efficient. It does not need buildings, it does not require on-site personnel, and it does not need time to “run approvals.” It serves millions of users, operates around the clock, and updates faster than users can get used to the interface. This is no longer just a technological advantage — it is a different economic model. Faster, cheaper, and closer to real life.

It is also important that, ultimately, users do not care what this model is called — whether it is a neobank or an ecosystem. They are not interested in organizational structures or regulatory classifications. They care about one thing: that everything works in a single application, without unnecessary steps or surprises. Money should arrive on time, payments should be instant, and services should be available when needed.

In the coming years, the bank will finally cease to be a separate element in a person’s life. It will become a background service. Risk management and lending will move into algorithms, borders between countries will lose significance, and the financial function will dissolve within super apps, where payments coexist with logistics, healthcare, education, and government services.

Ultimately, the winners will not be those with the most branches, nor even those who first called themselves a “neobank.” The winners will be those who become convenient, invisible, and reliable companions for users. Because in the future, a bank has only one place — in the smartphone. Everything else will remain in history.

(Telegraf.rs/PR)