Neobanks are financial technology firms that offer internet-only financial services and lack physical branches. Neobanks appeal to tech-savvy consumers who don’t mind doing most of their money management through a mobile app.

Neobanks don’t integrate new technology solely for the sake of being cutting-edge. By getting rid of physical branches and moving everything online, neobanks often save on the costs of banking, allowing them to cut fees and expand services to the underbanked.

Neobanks aren’t identical in their offerings or structure, but they typically differ from credit unions and traditional banks (including online banks) in that they: