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Starling Bank
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=== '''Key challenges in the industry''' === Although the digital banking industry is rapidly growing, there are some substantial challenges in which the industry faces and must look to resolve or combat. * '''Lack of face to face customer support''' '''-''' Neobanks offer all their customer support services digitally and while this may be quick and imminent, it is inconvenient for consumers who prefer face-to-face interactions. Complex banking scenarios can be made easier with the involvement of a personal banker which can help consumers with their options and find solutions tailored to their needs, which is may be difficult through an online service. * '''Cybersecurity''' - With digital banks operating completely online, they are vulnerable to fraud and cyber attacks. Fraud complaints against Starling, Revolut and Monzo have increased at a rate higher than customer growth, and higher than complaints at traditional banks. A neobank with poor security and customer protections would conceivably lose the public's trust and enormous business and revenue. Challenges such as account takeovers, chargeback fraud and loan fraud are all examples of criminal activity that digital banks are at risk from. * '''Shifting banking habits''' - As a result of the pandemic, there has been a massive surge in online banking amongst traditional banks slowing down the leakage of consumers. While traditional banks offer services both in physical branches and now digitally, consumers will be less inclined to shift to neobanks unless they have a unique differentiating factor. * '''Lack of knowledge among rural customers''' - Lack of knowledge among rural customers is indeed a key challenge in the expansion of neobanking. Despite the opportunities for greater financial inclusion, a variety of factors can create barriers for rural customers: *# '''Digital Literacy:''' Many rural customers may not have the necessary digital skills to use neobanking services. They may not be familiar with how to use mobile apps, understand online security practices, or navigate digital banking platforms. *# '''Access to Technology:''' Even if they are digitally literate, some rural customers may not have access to the necessary technology. They might not own a smartphone or have a reliable internet connection, both of which are crucial for accessing neobanking services. *# '''Trust in Digital Platforms:''' Many rural customers are used to traditional banking methods and may be hesitant to trust digital platforms with their money. This is especially the case if they are not familiar with digital security measures. *# '''Understanding of Financial Products:''' Financial literacy is another significant challenge. Rural customers might lack understanding of the various financial products and services offered by neobanks, making them less likely to take advantage of these services. To overcome these challenges, neobanks can invest in initiatives aimed at enhancing digital and financial literacy. This could involve conducting workshops, offering online tutorials, or partnering with local organizations to provide training. Additionally, they can design their platforms to be as user-friendly and intuitive as possible, making them more accessible to users with varying levels of digital literacy. Neobanks can also work to build trust with customers by implementing robust security measures and transparently communicating these measures to customers. They could provide resources to educate customers about online security and how they protect customer data.
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