Neobanks have upended the traditional business model, revolutionizing how people access banking services. With a mobile device and an internet connection, anyone can open and manage a bank account.
While this has promoted more financial inclusion, 1.4 billion people are still unbanked. To reduce this number, businesses are increasingly expanding into the neobanking sector, while traditional financial institutions are increasing their online banking service functionalities.
Unfortunately, this means greater competition for customers’ attention. To attract customers and grow your neobank’s profitability, you need to do more than offer efficient digital services — you must also market them.
In this post, we look at how exactly to do that. Read on to learn strategies that can boost customer acquisition and help your neobank stand out from the crowd.
Challenges that Neobanks Face in Customer Acquisition
There’s a digital transformation taking place in banking today. Customers are increasingly adopting mobile banking and choosing digital-only banks for their needs — as of 2023, there were roughly 1.1 billion neobanking customers, a near-20% growth from 2022.
However, a recent survey shows that 83% of consumers still prefer traditional banks with physical branches, indicating that there’s a long way for neobanks to go. Some of the challenges that prevent them from receiving wider adoption include:
Building Trust
As relatively new players in the financial services industry, neobanks have yet to fully gain customers’ trust. Clients who assess banking institutions based on track records may be hesitant to join these banks because they don’t have a long history of operations.
Further, as digital-only institutions, some customers think they’re more susceptible to cybersecurity breaches. These legitimate concerns make it harder to convince people to make the switch from traditional banks.
Regulatory and Compliance Hurdles
As with other banking institutions, neobanks operate in a highly regulated field. They must obtain banking licenses and comply with Know-Your-Customer (KYC) and Anti-Money Laundering (AML) regulations, which can be time-consuming and expensive.
Depending on their areas of operation, they may also need to comply with more specific guidelines, such as the California Consumer Privacy Act (CCPA) in California and the General Data Protection Regulation (GDPR) in Europe.
For neobanks operating in multiple regions, navigating different regulatory requirements can complicate and slow down customer acquisition efforts.
Customer Education
Despite growing in popularity over the years, neobanks are still foreign to many potential customers. Older generations and non-tech-savvy individuals may not fully understand neobanking features and benefits and, as such, may approach the solution with caution.
To dispel fears and help customers make the most out of their technology, neobanks must educate customers, which can be expensive. Seeing as this is not something traditional banks typically have to do, they, unfortunately, have the upper hand.
7 Ways Neobanks Can Acquire More Customers
Despite these challenges, neobank startups have substantial growth opportunities. If you play your cards right, you can capture the growing number of customers embracing digital banking. Here are some tips to help you:
1. Build Trust Through Targeted Messaging
Targeted messaging is a great way to build customer connections and foster trust. Rather than relying solely on generic marketing campaigns, create personalized messages that resonate with different audience segments to encourage them to engage with you.
For example, if you’re targeting business owners, you can create messages focusing on your pricing transparency. If you want to attract non-tech-savvy individuals, you can offer tips on navigating digital platforms.
2. Leverage Partner Ecosystems
As the iconic Helen Keller aptly put it, “Alone we can do so little; together we can do so much.”
With this in mind, develop strategic partnerships with businesses like fintech companies, payment platforms, and retailers to reach new customer segments. One way to do so is to create new products and customer incentives like exclusive offers together.
You can also offer integrations with tools your customers typically use, such as digital wallets (for crypto and other digital asset traders) and accounting software (for small businesses).
3. Simplify the Onboarding Process
You’ll likely attract some non-tech-savvy customers when you market your services effectively. To increase retention and eliminate confusion or frustration, create a seamless onboarding experience.
Use intuitive interfaces to facilitate easy navigation, leverage artificial intelligence tools to streamline account opening and management, and offer multi-channel customer support to ensure users can easily reach you for further assistance.
4. Emphasize Financial Wellness
Some customers want more than just banking services and financial products from their financial institutions — they also want financial guidance. To appeal to such clients, provide financial wellness tools like financial literacy guides, budget planners, and savings calculators.
If you want to go the extra mile to meet customer needs and really wow your audience, offer financial advisory services as well. This is not only a great way to draw interest and expand your customer base but also an additional revenue stream.
You can even offer access to cryptocurrency services to help interested customers dip their toes in alternative investment choices and diversify their portfolios.
5. Invest in Content Marketing and Thought Leadership
Position yourself as an industry expert by creating and publishing valuable content and thought leadership. Post blogs and videos that explore customers’ pain points and offer solutions to drive their interest in your services.
Also, leverage platforms like LinkedIn to discuss trends in the banking industry and partner with other institutions to host webinars on neobanking. This can help you attract customers looking for forward-thinking banking partners.
6. Optimize Customer Acquisition Costs
It may be tempting to market yourself on all channels and use every marketing tactic in the book. But you’ll only end up muddying your message and overspending on approaches that go nowhere.
Instead, conduct market research and use data analytics to identify the most popular channels with your target audience. Then, focus your efforts on those channels.
You can also conduct A/B tests to identify the most impactful messaging and offers and adjust your marketing campaigns based on what generates the highest engagement. As you refine your tactics, you’ll zero in on what works best for your audience.
7. Leverage Social Proof and User-Generated Content
This is one of the best ways to attract skeptical customers. Encourage existing clients to offer reviews and testimonials on your services and add them to your website or landing pages.
Social media is also a great place to invite customers to share their user experiences and tag you, providing you with free yet powerful user-generated content (UGC). Social proof elements show that people are successfully using your neobank and can, therefore, help build credibility.
Accelerate Customer Growth with AlphaPoint
Over a billion customers have already adopted neobanking, so it’s safe to say that this innovative solution is here to stay.
As more people learn about the features and benefits of digital-only banks, they’ll likely be on the lookout for service providers. Attract them by investing in your marketing efforts, streamlining the onboarding process, and partnering with other businesses to expand your reach.
With AlphaPoint as one of your partners, you can expand your offerings and value beyond banking by providing exposure to digital assets and cryptocurrencies. We’ve already provided digital asset infrastructure to various businesses, including Bancolombia Group, helping it launch a crypto-focused mobile app, and one of the largest banks in Thailand, allowing it to extend its reach into neobanking territory.
Schedule a demo today to learn how Alphapoint can help your neobank grow!
