How to Start a Neobank in 2025: The Ultimate Step-by-Step Guide

The rise of neobanks is reshaping the global financial landscape. Unlike traditional banks, neobanks operate entirely online, offering streamlined, low-cost banking services tailored to modern consumers. With growing demand for digital banking solutions, launching a neobank in 2025 presents a lucrative opportunity.

However, starting a neobank requires regulatory approvals, a strong technology stack, and a clear business model. Whether you’re an entrepreneur, a fintech enthusiast, or a financial institution looking to enter the challenger banks market, this guide will walk you through everything you need to know.

What is a Neobank?

A neobank is a digital-first financial institution that provides banking services without physical branches. Unlike traditional banks, neobanks leverage fintech innovations to offer seamless customer experiences, often focusing on mobile banking, AI-driven financial tools, and automation.

Key Features of Neobanks:

• No physical branches (fully digital operations).
• Lower operational costs compared to traditional banks.
• AI-driven financial insights and expense tracking.
• Faster customer onboarding using digital wallets and eKYC.
• Seamless integration with fintech companies for extended services.

Some well-known neobanks in the US include Chime, Varo, and Current, while in the UK, the top challenger banks include Monzo, Revolut, and Starling Bank.

Why 2025 is the Right Time to Start a Neobank

The global fintech industry is projected to grow exponentially, with neobanks leading the charge. Here's why 2025 is a golden opportunity:

• Regulatory support for fintech business models is expanding worldwide.
• API-driven banking is simplifying the launch process.
• The rise of digital wallets and cashless transactions is fueling demand.
• The top 10 banks in the UK and US face stiff competition from neobanks, indicating market gaps.
• Millennials and Gen Z prefer mobile-first banking experiences.

If you want to disrupt traditional banking, now is the time to start your neobank.

Step-by-Step Guide to Starting a Neobank in 2025

Step 1: Define Your Neobank’s Business Model

Before launching, decide on the business model:

• Fully Licensed Neobank – Requires a banking license and regulatory approval.
• BaaS-Based Neobank – Partners with a Banking-as-a-Service (BaaS) provider.
• Niche-Specific Neobank – Targets specific segments like freelancers, small businesses, or crypto users.

Each model has different regulatory and operational challenges, so choose wisely based on your funding and target audience.

Step 2: Secure Licensing and Regulatory Approval

Regulatory approval is one of the biggest hurdles in launching a neobank. Depending on your country, you may need:

• A banking license (if operating independently).
• An Electronic Money Institution (EMI) license (for digital wallets and payment services).
• A partnership with an existing bank (to bypass direct licensing requirements).

Each model has different regulatory and operational challenges, so choose wisely based on your funding and target audience.

Regulatory Bodies by Region:

• United States: OCC, FDIC, Federal Reserve
• United Kingdom: FCA, PRA (Top 10 banks in the UK operate under these authorities)
• Europe: European Central Bank (ECB)
• India: Reserve Bank of India (RBI)

Research the regulatory landscape before proceeding to avoid compliance issues.

Step 3: Build a Scalable Technology Stack

A neobank’s success depends on its technology infrastructure. Here’s what you need:

• Core Banking System: Handles deposits, payments, and loans.
• API-Driven Architecture: Enables seamless integrations with fintech companies.
• Cybersecurity & Fraud Prevention: Protects customer data from threats.
• AI & Automation: Enhances customer experience with chatbots and real-time financial insights.

Step 4: Implement KYC, AML, and Compliance Measures

To prevent fraud and money laundering, every neobank must follow strict KYC (Know Your Customer) and AML (Anti-Money Laundering) guidelines.

Best Practices for Compliance:

• Automated KYC verification using biometrics and AI.
• Real-time AML monitoring to detect suspicious transactions.
• Sanctions screening to block blacklisted accounts.

Regulatory compliance is not optional—it’s the foundation of a trusted fintech business.

Step 5: Create a Customer-Centric User Experience

Neobanks win customers by offering seamless, mobile-first banking experiences. Key focus areas:

• Fast and easy onboarding (sign up in minutes).
• AI-powered personal finance tools for budgeting.
• Instant cross-border transactions via digital wallets.
• 24/7 customer support with AI chatbots.

User experience is everything in neobanking—invest in top-tier UI/UX design.

Step 6: Develop a Sustainable Revenue Model

Unlike traditional banks, neobanks have unique revenue streams:

• Subscription-based models (e.g., premium accounts).
• Interchange fees from card transactions.
• Lending & credit services (BNPL, microloans).
• Cross-border payments and FX fees.

Diversify revenue sources to build a scalable fintech business.

Step 7: Market and Scale Your Neobank

Your neobank needs a strong marketing strategy to attract users.

Best Marketing Strategies for Neobanks:

• Influencer partnerships (trusted voices in fintech).
• Referral programs (reward users for inviting friends).
• SEO & content marketing (write blogs on fintech topics).
• Targeted social media ads for digital-savvy users.

Once you gain traction, consider expanding to new markets for long-term growth.

Conclusion

Launching a neobank in 2025 is a complex but rewarding journey. From securing licensing to building a scalable tech stack, success requires strategic planning and the right partners.

We at RemitSo provide a cutting-edge platform to help fintech companies and neobanks scale efficiently. Our API-driven solutions ensure compliance, automation, and seamless cross-border transactions—so you can focus on growing your business.

Want to accelerate your neobank’s launch? Contact RemitSo today!