Faraz Bank of Iran platform مین Land beyond neobank

According to Monetary Financial News, although a long time has passed since the emergence and life of neo-banks in the world; But this model of banking in Iran is an emerging phenomenon and despite its many charms, due to the lack of licenses so far, lack of infrastructure and lack of coordination with related institutions in this area, has not yet found its place.
On the other hand, some users and even financial experts consider the performance of banking software to be on par with neo-banks, and specifically consider it to be true of banking platforms such as Faraz. Accordingly, the public relations of Bank Iran Zamin decided in this research article, while redefining the neo-bank, to express the main and underlying differences of the platform belonging to this financial institution with the neo-bank.
What exactly is the definition of neobank?
Neo-bank literally means “new bank”. The term neo-bank is used for a new generation of financial and banking institutions that seek to fundamentally reconsider and re-create the bank’s business model. In these types of banks, the physical branch loses its former meaning and function, and everything users need, from opening an account and withdrawing and paying money to getting a loan, guarantee and credit, is done by referring to neobank software. In fact, Neobank is a complete and independent bank without branches, based on software and mobile platform, in which zero hundred banking affairs are done.
What are the most important neo-banks in the world?
Startups such as:
• Chime (USA);
• NuBank (Brazil);
• Monzo and Revolut (UK);
• N26 (Germany);
• Tinkoff (Russia),
They are one of the most valuable neo-banks in the world today. These neo-banks rely on artificial intelligence technologies, cloud computing services, convenient and smooth user interface and…; Succeeded in attracting a new generation of bank customers; A new generation that has grown up with the Internet and social networks and tends to do all banking services with just a few clicks.
Is there a neobank in Iran in the true sense of the word?
This is an interesting question and it is necessary to make an introduction to this question. Neobank startups have been operating in the country for nearly two years. One of the country’s private banks designed a startup in this area. This startup was developed in mid-2009 and in February 2016, its basic or initial version was provided to users.
With the outbreak of Corona, the popularity of e-services among the people reached a point that caused the resistance of some managers to provide face-to-face services to provide face-to-face services and one or two public and private banks could equip themselves with neobank and provide their services. Define in that format.
What can be seen in this process is that the dream of reaching a neo-bank has a significant distance from the fact that it has been set up by the mentioned banks. The reason is the lack of readiness of the Civil Registration Organization to cooperate with these startups in the discussion of authentication, lack of infrastructure and lack of determination and serious desire in the body of macroeconomic management with this model of banking so far. The Corona epidemic, however, has softened the conservative and anti-neo-bank spectrum; Therefore, despite some claims and comments, due to the lack of necessary licenses, among other factors, there is no neobank in the true sense of the word in the country; But steps have been taken in this regard.
The difference between a neobank and a digital bank
In recent years, with the further development of digital services in the country, some banks on the path to digitalization, such as Bank Iran-Zamin, thought of creating digital branches. These branches, like neo-banks, offer banking services online. The difference is that digital branches are set up by banks that have physical branches and part of the digital branch process may depend on the physical branch; But neo-banks offer their services to the user in the form of a complete bank and an independent startup.

The ups and downs platform of the operation of this banking software
Faraz stands for “Iran-Earth Modern Technology”. This banking platform was launched in Bank Iran-Zamin in early January 2017 and now has more than four thousand customers, all of whom are customers of Bank Iran-Zamin. This will enable Faraz to receive better feedback in the trial version and be more successful in attracting more customers. In one sentence, it can be said that the advantage of operating the platform is simplification, personalization of services and providing a pleasant experience to customers; An advantage that has gone through many difficulties to achieve.
Different down platform and beyond neobank
As mentioned at the beginning of the article, some equate the functionality of the Faraz platform with that of the neo-bank; While this is not the case; Because the nature of Faraz is fundamentally different from neobank; However, it can also include the services provided in Neobank. According to the managers of this banking platform, Neobank is a small subset of this type of banking. From the point of view of Bank of Iran technology experts, it is worthwhile to equate the neo-bank with just one bank without a branch.
Bank Iran-Zamin emphasizes that “Faraz” is not a neo-bank
With the cases covered so far in this article, the difference between a neobank and a digital bank is quite clear; However, in order to fully understand the nature of Faraz, it must be said that Neobank is not the only bank without branches that provides only electronic banking services; Neobank is a complete bank; But has no branch; In other words, in addition to providing electronic banking services, neo-banking also offers micro-banking services, issuance of various types of bank guarantees, providing various types of micro-banking facilities and services for companies and international organizations; Therefore, any software that does money transfer, account opening and other services can not be neo-bank.
With this introduction, we can not consider Faraz platform in Iran-Zamin as a neo-bank; Rather, it goes far beyond the neo-bank and includes it. Faraz is a digital banking platform, part of the processes of which may depend on branches. Their communication channel is not only mobile, but also has branch, internet and call center communication channels. However, the world-famous neo-banks have no branches and their communication with the customer is only through mobile.
Here are some other important reasons why Faraz is not a neo-bank
a. Simplification of banking services
This is the most important difference between Faraz and Neobank; Unlike neo-banking, it does not offer all banking services. The idea behind it is to simplify existing processes as much as possible; Process simplification is therefore part of the digital transformation that has been achieved. This has been a time-consuming and complex task for the designers of this platform; Because many simplifications have interfered with existing laws.
B. Use open banking
Perhaps the appearance of Faraz platform is not much different from mobile, internet and internet banking; But their function is different. In addition, open banking has been used to provide services. It can be said that Faraz will be an alternative to Mobile Bank of Iran; Because this bank has also provided the mobile and web version of Faraz; But the easy user experience and personalized space are the main differences with other electronic banking services.
J. Customer experience with Bigdita
Another point that Faraz designers emphasize in Bank Iranzamin is the infrastructure. In digital processes, unlike electronic processes, another data infrastructure is needed, which is the big data data infrastructure. Accordingly, according to the information of customers, special services are provided to him. This is fundamentally different from digital and electronic processes. In the digital process, the service is personalized and provided to the customer.
د. A dream bed for fintechs
According to Iran Zamin Bank executives, Faraz is now the only digital banking platform in the country with 4,000 customers; At the same time, the bank uses the same service that is available to fintech companies, and the changes made by the bank are also applied to the product of fintech companies. The platform establishes a two-way and effective interaction with fintechs, which is practically not possible in Neobank.

د. Focus on education and advertising
It is a proven fact that customers are still highly dependent on traditional banks. People are still looking at services with the idea of ​​e-banking, which requires work on advertising, branding and training. On the Faraz platform, customers feel comfortable by simplifying processes; Enjoyable experiences resulting from personalizing things on this platform also play a role in their memory.
With these interpretations, the platform does not have the function of a neo-bank; Because its nature is fundamentally different from neobank; However, this model of banking can easily be included in its sub-category if the necessary licenses are issued.