Neo Banks and DeFi

NEO BANKS AND DECENTRALIZED FINANCE Ayush Parab - TYBA Economics International Banking and Finance (ECOIBFC606) 08/01/2022 Mobile No – 9022125295

Introduction We've seen a significant shift in the finance business in recent years. Digital payments are widely accepted in the country, with over 2000 fintech companies. Customers are shifting away from traditional banks and cash in favour of internet banking and wallets. A Neo-bank is a type of digital bank that does not have any physical location. Neo banking does not require you to be physically present at a specific location. It's a broad category of financial service companies urging today's tech-savvy customers to use their services. Fintech organizations that provide digital and mobile-first financial solutions such as payments and money transfers, money loans, and more are known as Neo banks. Traditional banking and market services have also been, and continue to be, controlled by central authorities. Even while restrictions are vital, these authorities don't always conduct their jobs well and are biased in favour of their agenda. In such circumstances, the customer who uses their services must bear the brunt of the consequences. There are occasionally unnecessarily long delays in transactions and transfers, or hidden charges for even minor items. The GameStop Stock incident, in which trading applications such as Robinhood refused to allow their users to purchase shares of GameStop on their platform, is one example of a centralized authority abusing its position to deny people their rights. This is where DeFi or Decentralised Financing comes into play, Decentralised finance has the potential to significantly alter the global economy. DeFi will allow the unbanked to participate in the economy, cut the cost of doing business, and open up new investment opportunities for people all around the world. Financial services using public blockchains, mainly Ethereum, are referred to as decentralized finance. You can earn interest, borrow, lend, purchase insurance, trade derivatives, exchange assets, and more with DeFi, but it's faster and doesn't involve paperwork or a third party. DeFi is global, peer-to-peer (directly between two people, not through a centralized system), pseudonymous, and available to anyone, just like crypto in general. DeFi expands on Bitcoin's basic principle, digital money to provide a fully digital alternative to Wall Street, but without the associated costs like office towers, trading floors, banker salaries. This has the potential to create more open, free, and fair financial markets that anyone with an internet connection can access.

There is a popular opinion that Neo-Banks and Decentralised Finance will replace the traditional banking services currently offered. Neo-Banks with the services and infrastructure of Decentralised finance network can be a game-changing revolution in the banking space and can shape up the next decade for Personal and Professional Finance Neo-Banks and decentralized finance, according to popular belief, will eventually displace traditional banking services. Neo-Banks, when combined with the services and infrastructure of a decentralized finance network, can be a game-changing transformation in the banking industry, helping to shape the next decade of personal and professional finance. Assumptions • Consumers are gradually shifting towards cashless mode of transactions • RBI is providing incentives to banks to encourage online mode of transactions and reduce cash flows. Hypothesis • In this decade, decentralised finance will be the next big banking revolution. Variables • Neo-Banks and Fintech • Decentralised Finance • Blockchain • Banks and Banking

Learning Objectives • To study the working of Neo Banks and other Fintech companies • To analyse how blockchain works and how it is integrated into decentralised finance • To compare the current banking environment with the Upcoming fully online experience Analysis of Hypothesis and Assumptions For a long time, the Indian government has been attempting to move away from a cash-based economy. The government can use Neo Banks to encourage people to use cashless transactions. In comparison to traditional banking, blockchain technology provides users with a hassle-free and cost-effective banking alternative.

What is a Neo-Bank? A neo bank is a type of digital bank that does not have any physical location. Neo banking does not require you to be physically present at a specific location. It's a broad category of financial service companies begging today's tech-savvy customers to use their services. Fintech organizations that provide digital and mobile-first financial solutions such as payments and money transfers, money loans, and more are known as neo banks. Neo banks lack their bank licence and rely on bank partners to deliver bank-licensed services. As the financial environment shifts toward client experience and happiness, a gap between what traditional banks deliver and what customers want has emerged. And Neo banks are attempting to fill that need. Most traditional banks are stymied by their old infrastructure. As a result, when it comes to delivering financial services to SMEs, such as a payment gateway, invoicing software, and multiple views of cash management, they fall short. Because of this gap, as well as the explosion of mobile technologies, it's only natural that banking and other financial services will merge. How Do Neo Banks Function? The first distinction to make is that neo banking is not to be confused with digital banking. They're both banking services that leverage mobile and other devices to cut fixed overhead expenses and use technology solutions to do so. But that's where the parallels end. The way neo banks are set up and what they offer are noticeably different: a more straightforward, intuitive, and delightful user experience. In terms of business models, neo banks can go one of three paths: → FinTech’s that work with traditional banks and provide a mobile/web interface and wrapper around their partners' products but are not licenced. → Traditional banks are launching digital projects of their own.

→ Neo banks are licenced financial institutions that operate independently of regular banks. In nations that allow it, this is frequently the case with digital banking licences. While some neo banks have banking licences, the majority of them work with traditional banks rather than obtaining their own. The banking partner offers the overall platform for handling customer accounts, keeping customer funds, and providing the rails for interbank payments and settlements in this operational model. The neo bank is in charge of product distribution as well as managing the client journey from acquisition to servicing. Many neo banks, including as Monzo in the United Kingdom, Xinja in Australia, and N26 in Europe, provide traditional banking products and services. Other neo banks, such as Starling in the United Kingdom, provide both cheap and no-fee accounts and services. Some banks also provide tools for creating both branded and white-labelled banking products and services, allowing them to participate in the \"Banking as a Service\" idea. Features of a Neo-Bank ▪ Banking as a Service Neo banks want to make financial management easier for their customers, and collaborating with existing banking products is the key to doing so in the digital banking experience. They basically develop the goods and services application layer on top of banking partners' fundamental banking products and payment infrastructure. Third- party tie-ups allow neo banks to cross-sell value-added goods. This allows them to concentrate on improving the user experience of their goods. ▪ New Age, scalable and Flexible Tech Platforms Neo banks, which commonly refer to themselves as \"tech businesses first, banks second,\" are far more technologically advanced than traditional banks. A look under the hood of a neo bank's system reveals that both the front and back ends are entirely digital, with no clunky old IT platforms in the way. They're also mostly app-based, which means you'll be able to complete most typical tasks like account opening, fund transfers, and customer service with just a few taps of your fingers. Using neo banks to open a virtual bank account and manage your funds is simple, paperless, and can be done from the comfort of your own home.

▪ Marketing as a Strategic Differentiator The approach to marketing is a primary focus of neo banking. Neo banks make up for their lack of intrinsic consumer trust and legacy (many of them are virtually start-ups) through a diverse range of client engagement activities. This is the point at which neo banking separates itself from digital banking. Neo banks frequently use digital and social media to promote their campaigns, with a focus on community building, influencer marketing, and releasing positive testimonies. Customer referrals are also a valuable asset for any neo bank, and they are frequently modelled after successful platform economy giants like Uber and Netflix. ▪ Fully Digital Neo banks do not have physical locations, which distinguishes them from traditional banks. Neo banking is completely digital and app-based, which means you can do everything online and never leave your house. Many individuals are wary of entrusting their finances to neo banks because of their lack of transparency, which is why most neo banks partner with regular banks to provide protection to its customers. Digital banking services are also available entirely online, but they are not a separate business. They are always a digital service provided by a traditional bank, and you may need to visit your local branch for a few items. ▪ 100% Start-up Oriented All of the neo banks are financial services start-ups. Some focus on specific pain points that user may have with present banking services and make them easier to complete. Traditional banks and digital banks are both backed by financial institutions, and there can be a disconnect between what customers want and how they get it. ▪ Customer Focused Customers may perceive the fact that digital banks and traditional banks are both owned by financial organisations as a source of security. However, in the majority of cases, this also entails dealing with bureaucratic issues and adhering to historical traditions rather than implementing proactive changes that adapt to the demands of the consumer. The majority of modern banking services place a premium on the user experience. By bringing banking to the palms of clients' hands and making things easier, faster, and more efficient.

What’s Different in a Neo-Bank compared to Traditional Bank Bank Type Traditional Bank Neo-Bank • Platform • Physical branches and • Only Online Presence • Business Type digital presence • Customer Relationship • These are Startups • Backed by financial • Fees institutions • An important part of • Account Opening and overall operations and • Can be good or bad business Management depending on the bank • Extra Offerings • Minimal charges and • Complex and multiple transparent fee structure fees • Quick, simple, and fully • Tedious, time- digital consuming, and complicated • Regular with innovative value-added services • Limited or sporadic Traditional banks have separated their businesses for decades, with numerous systems and procedures working as separate entities. Furthermore, they function by having a physical presence with a large network of salespeople, distribution networks, and branches. Neo banks, on the other hand, operate on scalable open platforms. These are built on technology platforms that are connected to traditional banks via an open Application Programming Interface (API), making them scalable and flexible.

What is Decentralised Finance DeFi is an open, global financial system designed for the internet era, offering an alternative to a system that is opaque, tightly managed, and based on decades-old infrastructure and processes. It allows you to have complete control and visibility over your finances. It exposes you to global markets and provides you with alternatives to your local currency and banking options. DeFi products allow anyone with an internet connection to access financial services, and they are mostly owned and maintained by their customers. DeFi applications have already processed tens of billions of dollars in cryptocurrency, and the number is growing every day. Decentralized finance is a growing ecosystem of financial applications and protocols based on programmable blockchain technology like as Ethereum and Solana. The transactions are carried out automatically through smart contracts on the blockchain, which also include the deal's agreement. There's a thriving crypto economy out there, where you may lend, borrow, invest in long/short positions, earn interest, and more. DeFi has been utilised by crypto-savvy Argentinians to avoid catastrophic inflation. Companies have begun to broadcast their employees' pay in real time. Some people have even taken out and paid off multimillion-dollar loans without providing any personal information. According to Coin Gecko, decentralised finance has only 5% of the crypto market, but it has seen enormous growth recently. As of June 2021, the crypto market

has $93 billion in DeFi assets, up from $4 billion just three years before. To be sure, DeFi's development has slowed since the summer of 2020, and congressional scrutiny has increased due to concerns about crypto's shady past. What is different in Centralised and Decentralised Financing De-Centralised Finance You have access and power to hold Your money is held by Companies your own Money You have to trust companies not to You have control over your money mismanage your money, like lend and where it goes to risky borrowers Transfer of funds happen in Payments can take days due to Centralised Finance minutes manual processes. Transactions are actually Financial activity is tightly coupled pseudonymous with your identity. It is open to anyone and Everyone You must apply to use financial services. Markets are open 24/7 Markets close because employees Its main focal point is need breaks. Transparency Financial institutions are closed books: you can't ask to see their loan history, a record of their managed assets, and so on. Centralized Finance (CeFi) exchanges operate as a middleman to manage users' transactions and activities, and two different platforms are available to manage them.

Decentralized Finance (DeFi) exchanges do away with the necessity for a third party to oversee users' transactions and deals, allowing technology to take over and users to handle their own transactions and agreements. Both Decentralized Finance (DeFi) and Centralized Finance (CeFi) platforms have the same fundamental goal in mind: to make it easier for individuals to use cryptocurrencies for all of their financial requirements and services. However, how they carry out their tasks differs. How DeFi Works Although the entire spectrum of DeFi is currently limited in comparison to the global economy, we are expecting substantial growth in 2020. The DeFi economy had a value of $278.75 million in January 2019. However, by January 2020, that figure had risen to $676.24 million. It surpassed $1 billion in June 2020, and continued to climb in July, reaching $3.95 billion. Now, in October, it's at $11.2 billion, which is a huge sum of money. This expansion demonstrates how big DeFi is going to get, and despite the fact that it's still a small industry, it's attracting a lot of attention. However, many people are unaware of what DeFi is or how decentralised finance works. As a result, these applications essentially replicate the features and functionality of public blockchains. In essence, the DeFi blockchain is a ledger system that keeps track of all the various sorts of data transfers that occur on the network. In the blockchain network, these data exchanges are called \"transactions.\" After they've been validated, they're put to the ledger as a block. DeFi apps use a different sort of distributed network to ensure that all of the system's transactions are on time and exclusively amongst peers. Furthermore, once a blockchain has been verified and added to the ledger, no other peer can edit or delete it.

Using \"keys,\" the DeFi blockchain ensures that the process is secure. When you employ a set of encrypted keys with this technique, you'll acquire a unique identifier that no one else can see. A public and private key are usually included in this key pair. In actuality, this method of encrypting data with key pairs is known as \"asymmetric cryptography,\" and it's very popular in the blockchain world. In essence, other peers can see or use your public key to locate you on the network. You can authorise your transactions or any form of action with your private key, on the other hand. To perform some tasks on the DeFi blockchain network, you'll need a private key.

Some decentralised finance applications, on the other hand, work in a different way, allowing you to take operations using KYC standards. Because cryptocurrencies are involved, your public key will almost certainly serve as your digital wallet. You can purchase, sell, and even send cryptocurrency using your private key. This is why it's so important to keep it safe. As a result, you'll need to authorise a transaction with your private key before transmitting it. Once you've done that, the system will construct a block to reflect the transaction and alert others to verify it. After that, it will execute your transaction request and add the block to the ledger after others check that it is a valid request. Furthermore, each block is assigned a unique id and time frame, which prohibits malicious behaviour. You'll get pseudo-anonymous addresses with DeFi. So, while no one will be able to see your name, they will be able to view your address, which will be made up of random numbers and letters. How Secure is DeFi DeFi applications, on the other hand, aren't totally safe. In truth, no method can guarantee your safety 100 percent of the time. However, as compared to traditional monetary systems, DeFi ensures that it provides a considerably more robust security method In actuality, gaining access to these programmes is extremely tough and time-consuming. Because the technology is spread, cybercriminals must compromise every device that uses it. This consumes a lot of resources and is ultimately ineffective. However, if a DeFi application is released with an underlying fault or loophole, there are concerns. Many people are unsure whether using DeFi instead of CeFi is a good choice for this type of risk.

In any case, DeFi, like any other technology, is still in its early stages and has a long way to go. However, if we compare DeFi to CeFi, DeFi will undoubtedly prevail despite its shortcomings. Key Elements of the DeFi Ecosystem and How They Function ▪ Open Ledger Standards When developing a new type of DeFi application, the majority of decentralised finance companies adopt open ledger standards. This ensures that various applications can communicate with one another. Decentralized applications will not be interoperable with one another unless they use common standards. Another fantastic reality is that without open-source standards, businesses will be unable to employ common standards. However, because the majority of the applications are built on Ethereum, it's safe to assume that these applications will follow a similar set of standards. These standards also assist lending platforms in providing greater flexibility when it comes to digital assets. Additionally, using public blockchains has its own set of advantages, such as - 1. Network with no permissions 2. Interoperability 3. Transparency 4. Immutability 5. Transactions that are completed faster ▪ Smart Contracts The DeFi ecosystem would not be complete without smart contracts. Smart contracts, in actuality, aid in the automation of the decentralised finance process. Everything from borrowing and lending to insurance claims may be automated using smart contracts. Almost every DeFi application makes use of smart contracts to make its features easier to use. The best thing is that smart contracts eliminate the need for a middleman, which means there are no intermediate fees. Smart contracts are simpler, faster, and more secure than traditional contracts. However, there are risks in DeFi when smart contracts are used to enable actions.

▪ Stable Coins Stable coins are another important part of DeFi. Stable coins, rather than cryptocurrencies, are being promoted by decentralised finance companies. Typical cryptos are usually extremely volatile, and employing them in DeFi can cause the financial system to become unbalanced. Stable coins, on the other hand, are tethered to real-world currencies or assets. In actuality, as compared to traditional cryptos, this approach makes it more stable. In any case, even when the prices of cryptos fluctuate, these are supposed to remain constant. Stable coins are divided into four categories. The following are — 1. Fiat Collateralized These are primarily pegged to fiat money, such as the US dollar. In actuality, as compared to other stable coins, these are more popular in the DeFi area. Also, to make it more stable and less volatile, they are usually pegged at a 1:1 ratio to fiat currency. As a result, better restrictions will be needed to make it more popular than fiat money. The problem is that these are backed by fiat currency, making them somewhat centralised. As a result, DeFi's main feature directly opposes this feature. 2. Crypto Collateralized The value of these stable coins is linked to the value of a cryptocurrency. However, you may believe that this will increase rather than decrease volatility. These stable coins, unlike fiat-collateralized stable coins, are not fixed in a 1:1 ration. These are frequently over-collateralized to decrease their volatile character. As a result, when prices fluctuate, the stable coin can absorb the changes. Furthermore, because these stable coins are backed by cryptos, they are more decentralised. As a result, the lack of trust, transparency, and security are still present. 3. Commodity Collateralized Commodity-collateralized stable coins are backed by physical assets like as gold or silver. Gold, I suppose, is the most prevalent commodity. Stable coins, on the other hand, can be backed by real estate, oil, or even precious metals.

As a result, stable coin owners will be in possession of a tangible asset with real- world value. This is something that no other cryptocurrency can provide. People tend to save these coins since they can raise the incentive for them over time. 4. Non-Collateralized These coins have no assets to back them up. In actuality, it may appear to be at odds with the ideas of stable coins; yet, it works. If people believe in their value, it can preserve its stability, just as the US dollar. However, these are governed by a centralised body in order to keep supply and demand balanced and maintain a steady value. ▪ Marketplaces and Exchanges The DeFi ecosystem also includes decentralised exchanges and open marketplaces. Decentralized exchanges, on the other hand, ensure that users can trade digital assets without revealing their true identities. These exchanges can also save time, save fees, and provide security. Users can exchange assets or items directly on marketplaces without any problems. It provides it a unique perspective on online markets because you won't have to rely on a third party to provide the platform. Some markets also include freelance gigs where you may get paid for your services. ▪ Asset Management and Insurance Platforms Asset management, which also includes investment management, is part of the DeFi ecosystem. Users can manage their assets and find investment opportunities using these platforms. Essentially, these wallets aid in the transfer, purchase, and sale of digital assets by allowing users to communicate with trading programmes. For the benefit of consumers, decentralised finance businesses also provide insurance platforms. In actuality, the insurance business requires reform due to excessive paperwork and bogus claims. Insurance claims, on the other hand, take much too long and are fraught with complications. However, insurance management platforms can speed up the process by utilising smart contracts and utilising auditors to verify the validity of an insurance claim.

Can Neo Banks and Decentralized Finance replace the Current Banking Landscape The financial environment in India has gone a long way from its inception a few decades ago. The integration of the Core Banking System (CBS) into the sector was one of the main paradigm shifts. Banking operations in India used to be done in silos. People are increasingly turning to digital platforms for a variety of purposes. This encompasses everything from shopping to entertainment, as well as reserving services and paying bills. The same is true for banking requirements. Modern banking operations require ultramodern solutions to meet such demands. It is here that neo banks have a significant advantage. The banking industry has undergone a tectonic upheaval as a result of the Fintech revolution. In India, there are about 2000 Fintech start-ups. Several online financial services, such as digital payments, online banking, online investment, and insurance solutions, have exploded in popularity in recent years. Neo banks are one of the outcomes of the Fintech disruption. The rise of digital financial solutions is fuelled not just by technology advancements, but also by a growing need for solutions that can be accessed at the press of a button. According to statistics, digital payments in India have had a rapid increase in the last few years. India reported 48 billion digital transactions in 2020, and by 2025, it is expected to account for 71.7 percent of total payments volume. Neo banks do not require the same level of infrastructure as traditional banks. This reduces expenses associated with property, people, resources, equipment, and their management. The cost savings are passed on to their consumers in the form of cost-effective and value-for-money services. They are able to innovate considerably more quickly than traditional banks. Regulators' stances are only strengthening over time as they encourage innovative financial models through measures like regulatory sandboxing. Neo banks have been in the forefront of managing a vast amount of data in a secure manner thanks to advanced technology such as Cloud. People may be concerned about the validity of neo banking operations and security measures in the absence of a physical branch. As a result, neo banks use cutting-edge encryption technology and other cutting-edge security measures to protect sensitive and personal information and give a safer user experience to their clients.

They're transforming the Fintech landscape and may one day supplant traditional banks, but it's not simple, and no one knows for sure. Neo banks are similar to digital banks in most ways, but keep in mind the word \"mainly.\" They are more well-known as businesses than as banks. In India, the Reserve Bank of India (RBI) still prohibits banks from being entirely digital while maintaining some physical presence. The primary reason for this, as well as the distinction between Neo banks and traditional banks, is money, not to mention client trust. Traditional banks may struggle to compete in this tech-savvy world, but their heritage cannot be lightly dismantled. Neo banks have become a hot topic in the fintech sector, and they've done a fantastic job of keeping their visibility on a global scale, with new businesses and banks signing up with them every day. Everywhere we look, we see a new player whose goal is to simplify financial services while also providing additional benefits. Though revolutionising the entire banking and finance business would be difficult, it will require time and a lot of hard effort for tech geeks. \"It's the little tweaks that make the biggest improvements,\" as the adage goes. Many governments, central bank, and established participants in the industry actions have been brought into question since the financial crisis of 2008. The creation of Bitcoin in 2009 provided the world — or at least a portion of it — with the tools needed to create a new financial system based on decentralised consensus rather than centralised fiat. Many in the traditional finance industry regarded cryptocurrencies with contempt until recently. However, fresh developments are prompting a reappraisal. Bitcoin has long had a tense relationship with banks. As governments and fintech companies warm up to the idea of trading and keeping cryptocurrencies for profit, this is beginning to change. Faced with a surge in digital assets, central banks have begun testing central bank digital currencies (CBDCs), which are fiat-backed cryptocurrencies. This transition shows a level of maturity that helps to explain, in part, the formation of a decentralised finance ecosystem, often known as DeFi. Bitcoin, on the other hand, was never intended to be a speculative asset, but rather to serve as a supplement (or replacement) for established financial institutions. Because of the growth of Decentralized Finance (DeFi), this vision may be closer to reality than many people believe. However, there are still a few roadblocks to overcome like 1. Replacing Fiat currency is next to impossible

2. Regulatory Problems 3. Effective utilisation of Smart Contracts When you consider how quickly central bank digital money programmes are moving, the era of cryptocurrencies may arrive sooner than many people anticipated. It is not an issue of rejecting decentralised finance or devoting a significant amount of effort to it for banks. However, in the short run, one option could be to just invest in it like any other emerging market. DeFi's popularity has surged 88-fold in a year, indicating that many customers are yearning for a more flexible, useful, and less restricted solution. DeFi is plagued by a lack of education, implementation issues, and a poor user experience. However, it does represent a significant shift in the financial services business, and it's one worth noting. It's worth noting, though, that most efforts to regulate or legitimate Bitcoin and other cryptocurrencies treat tokens as assets rather than legal cash. Some countries, like as Russia, have outright prohibited the use of cryptocurrencies as a form of payment. The Reserve Bank of India was rumoured to be trying to red-flag DeFi platforms in October, despite the fact that India has no regulations in place to deal with cryptocurrencies, let alone DeFi. While it would be extremely difficult for a country to outright ban cryptocurrencies, government support is required for widespread use. The bitcoin ecosystem is building the tools it needs to become a mature economic system in its own right, but only time will tell whether governments are willing to let it coexist, much alone replace, their own centralised systems.

Conclusion For GenZ and millennials who want everything at their fingertips, neo banks are the ideal method to handle their funds. Young people, who dislike traditional brick-and-mortar banks, like the benefits of neo banks, such as the lack of monthly fees, withdrawal expenses, and the possibility to conduct international transactions, among other things. The lack of a physical branch also provides the added benefit of higher savings interest. Furthermore, there is nothing like the simple process of obtaining a loan from a neo bank. For GenZ and millennials who want everything at their fingertips, neo banks are the ideal method to handle their funds. Young people, who dislike traditional brick-and-mortar banks, like the benefits of neo banks, such as the lack of monthly fees, withdrawal expenses, and the possibility to conduct international transactions, among other things. The lack of a physical branch also provides the added benefit of higher savings interest. Furthermore, there is nothing like the simple process of obtaining a loan from a neo bank. A neo bank’s benefits also include 24-hour customer service and intelligent chatbots with a solid database that can answer all client questions at any time of day. Neo banks are a relatively new concept in India, yet they are gaining traction. Neo banks are the future because of their numerous benefits and the preference for anything online. For the first time in history, a large-scale financial system is being developed without the need of middlemen. Until far, DeFi applications have not been able to compete with traditional finance solutions in terms of security, speed, or convenience of use. However, DeFi has created real-world applications that have already attracted billions of dollars. In the future, those resources will be employed to produce more competitive and user-friendly programmes. Yes, there are parallels to the 2017 ICO euphoria, which culminated in a strong price surge and subsequent price drop across nearly all cryptocurrencies in 2018. The mainstream media's attention has waned since then. However, the influx of funding through ICOs has enabled the blockchain community to take the technology to the next evolutionary level, which has gone virtually unrecognised. Large quantities of money are being invested in blockchain technology once again. In contrast to 2018, however, applications have already been built and are in use. While we may be on the verge of a new bubble, blockchain technology may also be at the start of a new major development cycle. Many more development cycles are undoubtedly required. Decentralized finance, on the other hand, is not unthinkable in terms of being more efficient, convenient to use, and secure than traditional finance. It will be fascinating to see how the various participants in traditional finance react when profits start to suffer as a result of DeFi.

Neo-Banks and Decentralized Finance will be the preferred banking model for the next decade, but none will be able to completely replace the current banking environment, and both will coexist.

Limitations ❖ Primary Sources of Information was not available because of the current landscape ❖ Not a lot of information was available readily even through secondary sources ❖ Figures, Charts and Graphs were not readily made and information was only available in Raw format Benefits from Selecting the Topic ❖ This Assignment helped in getting to learn more about the new age banking solutions, and the technology which might be the future of banking ❖ Knowledge about Decentralized financing, its Pros and Cons. Its limitations and how vastly it can be used ❖ Learning about the various services Neo-Banking offers in comparisons to Traditional Banking

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