Neobanks, digital-only banking institutions, are revolutionizing the financial industry by improving access to banking, lowering costs, and advancing technology. They are particularly important for enhancing financial inclusion by providing easy-to-use banking services to unbanked and underbanked populations, especially in less-developed economies. Unlike traditional banks, neobanks utilize cutting-edge technologies like artificial intelligence, blockchain, and data analytics to offer affordable and accessible services. Their focus on digital platforms allows them to reduce operational costs and reach customers who have been excluded from traditional banking systems. This paper examines the impact of neobanks on financial inclusion through an econometric model, analyzing neobank penetration across 34 countries. The findings show that neobanks not only challenge traditional banking methods but also drive significant improvements in financial inclusion. The research highlights that neobanks have a greater positive impact in countries with supportive regulatory environments and high levels of innovation. Despite facing challenges such as regulatory hurdles, profitability concerns, and increased competition from established banks, neobanks are well-positioned to support the global push for more inclusive financial services. Their continued growth and technological advancements make them key players in reshaping financial access and contributing to the digital economy's evolution.
Paslari et al. (Sun,) studied this question.