Julian Drago
April 15, 2025
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Neobanks are transforming the way people manage their money. Unlike traditional banks, these 100% digital entities have no physical branches and operate through mobile apps and web platforms. This new generation of financial services has gained popularity thanks to its adaptability, efficiency, and user-centered approach.
In Latin America, neobanks are growing at a rapid pace, driving financial inclusion and challenging traditional models. But what makes them so appealing? How do they work? And what should you consider if you're thinking about opening an account with one?
A neobank is a financial entity that operates exclusively in digital environments. They have no physical offices or long queues for procedures. Everything happens through an app or website: from opening an account to making transfers or requesting a card.
Although they offer services similar to those of conventional banks—such as savings accounts, cards, and loans—their main difference lies in the digital experience, operational agility, and lower operating costs, which translates into fewer fees and better conditions for users.
Neobanks operate through modern technology platforms, usually hosted in the cloud. Some of these entities hold their own banking licenses, while others partner with regulated banks, allowing them to offer services within existing legal frameworks.
Users can open an account in minutes, send money, make payments, receive real-time notifications, automate savings, or categorize their spending—all without visiting a branch. They also integrate tools like artificial intelligence and biometrics to offer a more secure and personalized experience.
These features have made neobanks especially attractive to young people, digital nomads, entrepreneurs, and those looking for simpler and more affordable ways to manage their money.
Although the first neobanks emerged in Europe, Latin America has quickly caught up. Countries like Brazil, Mexico, Colombia, Argentina, and Chile now have well-established platforms that have made a significant impact on financial inclusion.
In Brazil, for example, the fintech ecosystem is among the most innovative in the world. Neobanks like Nubank have attracted millions of users with their transparent and simple approach.
In Colombia, platforms like Nequi, Movii, Lulo Bank, and Ualá have gained ground quickly, offering digital accounts, cards with no maintenance fees, microcredit options, and more. Many of these services target populations historically excluded from the financial system, such as informal workers or individuals without credit history.
In Mexico, growth has also been notable. Neobanks like Klar, Albo, and Fondeadora have promoted digital access to banking services, enabling more people to manage their finances without relying on traditional banks.
Despite their benefits, neobanks face significant challenges. Some do not have full banking licenses, which can limit deposit protection. Also, operating entirely online requires high levels of cybersecurity to maintain user trust.
There are also regulatory challenges. While more countries are updating their legal frameworks, many neobanks still operate under hybrid models that require ongoing supervision to protect consumers.
On the other hand, some users still prefer in-person service and traditional banking advice, which poses an educational and trust-building challenge for these new entities.
The trend is clear: neobanks will continue to grow. Their ability to scale quickly, their user experience focus, and their technological adaptability position them as key players in the future of the financial system.
In Latin America, their role will be particularly relevant in closing gaps in access to the financial system and promoting savings, responsible lending, and financial education.
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Are neobanks safe?
Yes, as long as they are regulated by financial authorities and implement cybersecurity measures such as biometric authentication, data encryption, and AML/KYC protocols.
Can I have a neobank account if I already have one with a traditional bank?
Absolutely. There are no limitations, and many users use both services in parallel to diversify their financial management.
Are there neobanks in every Latin American country?
Not yet, but more countries in the region are offering local or international options. Mexico, Brazil, Colombia, Argentina, and Chile are among the most advanced.
What’s the difference between a neobank and a fintech?
Neobanks are financial entities that can operate as digital banks, while fintechs are companies that offer tech-driven financial services without necessarily being banks. A neobank can be considered a fintech, but not all fintechs are neobanks.
