Neobank in messengers and Ukrainian reality

The global banking system is undergoing significant changes. Banks, fintech startups and other financial institutions are working night and day for the implementation of something better and more convenient for their users. Ukraine is also actively moving toward cashless. At about four years ago, there were doubts about the prospects of a neobank in Ukraine, and today thousands of people don’t understand how they could get along without it. But even an ordinary neobank is already becoming an everyday product, and new projects are entering the arena. One of them is a neobank in messengers. This is the Zelf neobank, which was created to meet the needs of Y and Z generations.

What is it and how does it work?

This type of neobank is operating without both bank branches and applications. The communication and operations are carried out through the beloved and familiar to everyone messengers. A person should get a virtual card to make payments via that system. You can transfer money as well as create or pay an invoice in a typical chat. However, it is impossible to withdraw money from the account. Apple Pay & Google Pay are used for offline and online purchases with a virtual card added to them.

This is certainly interesting. A generation Z, that has already completely forgotten about long telephone conversations, and prefers text and voice messages, will definitely appreciate the functionality. But it’s too early to talk about the pros and cons of such project. It takes time to understand whether such a system of managing personal finances is perfectly suitable for the youngest segment of the consumer audience.

Is the operation of the neobank in messengers possible in Ukraine?

The development of the fintech industry in Ukraine is gaining momentum. New financial and digital services successfully catch on. We are actively moving towards the creation of a full fintech ecosystem, and regulators contribute to that process as far as possible. However, can a neobank without branches and applications be launched in Ukraine?

So far, Ukrainians can’t fully enjoy the services of such bank. An appropriate legal model of operation that conforms to the regulatory framework of the State Commission for Regulation of Financial Services and the National Bank of Ukraine is required for its operation. In addition, such services also need partner banks and the established business model. Given the current regulatory framework, a neobank in messengers can be only a sub-licensee of a traditional bank. A project, that carries out certain functions from the list, but is actually a traditional bank.