Are neobanks safe?

neobanks security

If you are asking this question, it means you are considering moving your money, or at least some of it, into a neobank account and you are wondering if a neobank is safe. 

You may be worrying about two big risks:

  • what if a neobank fails?;
  • can I lose my money if my account gets hacked?.

Let’s start with the first question. A neobank may be a digital bank providing financial services in a very different way, compared to traditional branch-based financial institutions.

But in order to provide financial services, they have to abide by the same laws and regulations that apply to banks and other financial institutions on the market.

Neobanks are regulated and their customers are protected by customers protection laws. If a bank fails, customers’ money is protected up to the legal limit in your country. This may vary from fully licensed neobanks (the ones with a full banking license) and those operating under other licenses, like an “e-money” or “payment institution” license.

Ok, but is my money safe in a neobank account?

This second question is about neobanks and cybersecurity. All regulated financial institutions must also respect precise IT security requirements and neobanks are no exception.

As native digital players, neobanks can also rely on very modern and up-to-date IT infrastructure that makes them at least as safe as the online services provided by a traditional bank.

By the way, the safety of your money is also your responsibility. The weakest link in the banking cybersecurity chain is the customer, i.e. YOU.

Banks and neobanks have very sophisticated security solutions and procedures. You don’t. Cybercriminals target us, consumers, with tons of spam and phishing emails for a very simple reason: many people don’t recognize scam messages, they click on them and give their personal data or, even worse, their online banking credentials to criminals.

So, if you want to be sure your online banking account is safe, protect yourself. Keep your computer updated, install an antivirus, learn the basics of safe internet surfing. And don’t open emails stating you have won 5 million dollars in a lottery. You didn’t.