As the shift toward digital banking becomes a more prevalent, neobanks are positioned for the rise in tech-enabled giving.
Brick-and-mortar banks are becoming a thing of the past as most people now experience their banking through a digital platform, be it a website or app. As financial services become increasingly digitized, there is an increased opportunity for challenger banks—those that directly compete with the traditional behemoths of banking—to gain popularity.
Expanding Accessibility for Everyday Users.
Over 30% of Americans currently use—or are planning to use—accounts at neobanks.
By prioritizing digital access, neobanks are able to lower operational costs, which in turn enables them to offer lower fees than their brick-and-mortar competitors; with reduced overhead costs, they are more easily able to scale. Other hallmark features of neobanks include budget tracking tools and even automated savings, which distinctly appeal to everyday clients.
Many neobanks are becoming highly specialized to serve groups who may be historically excluded from or underserved by the financial services industry—be it Black and Hispanic communities with Greenwood, LGBT community with Daylight, AAPI community with Cheese, or even youth with Greenlight.
The trend toward accessibility and inclusivity in wealth-building fosters an alignment between the values of the company and its clients. In effect, neobanks are fostering communities of clients that share an identity, financial background, need, or goal.
Increasingly, neobanks that serve a specific group have an aligned element of community reinvestment. By both building financial capital amongst underserved populations and paying it forward to others, neobanks are able to double their positive impact. Now, they are poised to introduce flexible donation tools within the customer portal so customers can have greater autonomy in making an impact.
Neobanks are Primed for Digital Giving.
Until recently, few banks have introduced charitable savings accounts or other philanthropic tools due to the traditional costs and barriers. However, with greater automation, lower fees, and a more distinct value-alignment, neobanks are primed to take advantage of digital giving options.
Clients are looking for ways to view and manage charitable giving and store tax receipts in one place. Imagine opening your bank account to see your charitable savings alongside your checking, savings, and credit card statements. Just as neobanks offer automatic savings and investing features, now too can they offer automatic giving options.
By introducing a charitable product amongst their other offerings, neobanks have the power to shift the philanthropic landscape. Now, generosity becomes front of mind when customers engage with their finances. Bringing giving into the fold enables customers to manage their financial goals within a holistic context.
Making an impact aligned with client goals.
When neobanks bring giving into the banking experience, they strengthen customer connections, particularly amongst younger generations and those who have been historically excluded from financial services. Younger generations increasingly prioritize social impact initiatives in the products they buy and organizations they support.
Just as traditional banking was limited to wealthier customers, so too was philanthropy. With the introduction of digital banking, that’s changing on both fronts.
Making an impact is no longer limited to those who are considered part of the wealthy elite—donors of any financial background can make an impact, so long as they have the tools to do so. Whether you are in the 1% or 99%, anyone can now become a philanthropist.
Introducing a digital donation platform, like DAF 2.0 by Amicus.io, can empower donors of any background, size, or scale to make an impact.