Neo banks, also known as digital-only banks or challenger banks, are financial institutions that operate entirely

online without traditional physical branches. The concept emerged in response to technological advancements,

changing customer expectations, and the need for more efficient, user-friendly, and cost-effective banking

services. In countries like India, the neo banking sector is expanding rapidly due to the increasing penetration of

in factors with respect to roles, convivence and satisfaction level among respondents. The factors on roles,

convivence and satisfaction level have been identified. Therefore, this study would assist students in acquiring

the required knowledge to make savings and investment decisions in future in order to reach the desired

economic growth.

Keywords: Neo-banking, Roles, Challenges, Satisfaction Level, Investment Decision and Economic Growth.

The global financial industry is undergoing a profound transformation driven by rapid technological

advancements. At the forefront of this disruption are neo-banks, which operate entirely through digital platforms,

eliminating the need for physical branches. These digital-only or challenger banks are designed to enhance the

user experience through technologies such as artificial intelligence (AI), big data analytics, cloud computing,

This research seeks to explore the phenomenon of neo-banking in depth—examining its roles, convivence and

satisfaction level of millennials on the broader financial services landscape. Through an extensive review of

existing literature and analysis of industry data, the study highlights how neo-banks are reshaping financial

norms and what their rise implies for the future of banking. The findings will offer strategic recommendations

for financial institutions, policymakers, and regulators to foster a secure, inclusive, and innovative digital

banking environment.

This part of the paper brings out the results of review of literature made on the chosen topic based on few

important studies conducted in the past:

Sharma (2023) emphasize that neo banks in India lack direct banking licenses, forcing them to rely on partners

Matraku (2024) further highlights how financial literacy and tailored services for specific demographic groups,

such as international students, can enhance customer satisfaction and trust in neobanks.

The literature also underscores the transformative impact of fintech on traditional banking. Studies by Lindströ

m and Nilsson (2023) suggest that neobanks represent a paradigm shift, challenging traditional banks through e

nhanced customer experiences, affordability, and speed. However, traditional banks continue to hold dominanc

e due to their established regulatory compliance and larger customer base.

Research frameworks like UTAUT-3 (Unified Theory of Acceptance and Use of Technology) have been emplo

yed to study customer adoption of neobanking services. Bhatnagr and Rajesh (2023) highlight how behavioral f

actors such as habits, hedonic motivation, and perceived risks influence customer decisions. The findings stress

the need for neobanks to address risk concerns while prioritizing simplicity, accessibility, and transparency to g

need for physical branches. A major factor driving the growth of neo banks is their role in promoting financial

inclusion. In many developing regions, large segments of the population remain unbanked or underbanked due

to challenges such as geographical isolation, complex documentation processes, and a lack of trust in

conventional financial institutions. By leveraging advanced technology, neo banks simplify account opening,

enable instant fund transfers, and provide affordable, user-friendly financial services. As a result, they are

successfully reaching underserved communities and small businesses that have long been excluded from

traditional banking systems.

Need for the Study

Neo banks are reshaping the banking sector through innovation and efficiency. By operating without costly

consumers, particularly millennials and Gen Z, expect fast, seamless, and always-available financial services.

Through intuitive mobile apps and intelligent features such as automated savings, spending insights, budgeting

tools, and real-time alerts, neo banks deliver personalized, accessible, and satisfying banking experiences that

align with the expectations of today’s digital generation.

1. To examine the role of NEO banks in reducing financial stress and improving mental well-being.

2. To examine the NEO banking convenience for users.

3. To evaluate the satisfaction of users on NEO banking services.

The present study is relating to the role, convenience and satisfaction level towards Neo banking services and it

sampling technique. Primary data from 100 respondents was collected through structured questionnaire. To

analyze the data collected from students and verify the hypotheses set, various statistical tools and techniques

have been applied in the study such as ANOVA, contingency coefficient, P value and factor analysis, hypotheses

set for the study are tested. SPSS version 20 was used for data analysis to draw meaningful conclusion.

Limitations of the Study

 The study is conducted only in Mysuru with a pre-determined number of respondents. As a result, the analysis

has been done based on the information provided by the sample respondents which may not be free from

bias. Thus, generalizations drawn by the study may not be extended to the whole population of the students.

 Students may not have disclosed their personal information to maintain secrecy which makes the study

incomplete.

Typically, items having a coefficient of 0.70 are considered adequate for the study. The outcome of reliability

analysis of the variables is presented in following table.

be adequate. The Chi-square test value is 349.1009 and it is significant at five per cent level. Therefore, the test

strong factors that jointly influence the awareness and usage of Neo banking service at first place. Managing

money through Neo banks positively affects the mental well – being and Control of money because of Neo

banking service are identified under second component. Accordingly, these identified factors are the strong

factors that jointly influence the awareness and usage of Neo banking service at second place.

This part includes the Neo banking Convenience of the respondents.

H

: There is no significance difference in the Neo banking convenience of the respondents.

H

: There is a significance difference in in the Neo banking convenience of the respondents.

The NEO Banking Convenience among respondents are presented in the above table. The F-test is significant

five per cent level. Therefore, significantly differing from other. There is a significant difference in Neo banking

apps are easy to use and navigate with p-value 0.0000, there is a significant difference in access the Neo bank

account anytime and anywhere without issues with p-value 0.0000, Neo banking saves time compared to

traditional banking with p-value 0.0000, Easily access the Neo banking app with p-value 0.0000 and The Neo

samples used for the present factor analysis are found to be adequate. The Chi-square test value is 242.561 and

it is significant at five per cent level. Therefore, the test of sphericity has been satisfied. This implies that there

The factors identified under one component are presented above. All five factors are identified. Neo banking

apps are easy to use and navigate, Access the Neo bank account anytime and anywhere without issues, Neo

banking saves time compared to traditional banking, easily access the Neo banking app and The Neo banking

H

: There is a significance difference in satisfaction of Users on Neo Banking Service of the respondents.