Starbucks, Is It A New Neo Bank?

Merging banking services and other sector businesses is a growing trend around the global market. Because of highly increasing competition, firms are under the pressure to make their suggestions and types of services more diverse. They are not only increasing the variety of major products or services but adding extra secondary directions to their business. It is working like a plan B, which helps the main organization's direction to achieve its mission.

Today we will talk about one of the biggest and most prestigious coffee companies in the world, Starbucks, which because of its recent organizational activities and politics, can be considered a new neo bank on the market. But before we will start discussing the relevance, let’s overview both definitions in general.

No matter whether coffee is part of your daily life or not, you would definitely hear of Starbucks. This is a company, founded in 1971 and includes more than 32 000 coffee stores in 80 countries around the world.  Their main product is coffee, but Starbucks also sells different kinds of baked goods. 

As they claim, their mission is to inspire society, and each human spirit with one cup of coffee. Over the years, they changed the culture of drinking coffee and ensured people that drinking outside the house was a better beginning of the day. 

Changeable creativity, flexibility, diversity, and customer-friendly service were the central keys to company success. Even though the coffee industry is growing every day and more and more companies are suggesting coffee to worldwide society, Starbucks is still one of the leading in this market. It stays one of the favorites for every age and culture person. 

Here we have to mention that, Starbucks played a huge role in creating more coffee variations and making the coffee culture more than just the ordinary black coffee. If you are not familiar with these high varieties or you are new to the coffee world, to avoid confusion, there are many guides, such as Brewlogy to find the best coffee type for you, with their features, pros, and cons. This will help you to understand the great coffee variations Starbucks suggests to people. 

What Does Neo Bank Mean?

Neo banks are also called challenger banks, which suggest costumes online, mobile banking via different apps, and other software. They are featured with particular product suggestions and require user account savings. 

They are more user-oriented and transparent with the informative side compared to the classic or other megabanks. So, neo banks are fintech companies. The main advantage of using these companies is that it does not include high fees such as megabanks. In addition, users can conduct everyday activities and payment tasks anytime. Also, such kinds of fintech have a higher reputation and rates because customers love banking systems with low fees. 

Because of the positive response from customers, the popularity, as well as a number of neo banks, is increasing rapidly. According to the new searchings, neo banks are trying to get a competitive advantage by adding new services. That is why annually each neo bank is adding 10 new services on average. 

So, the main difference between a classic and neo bank is that they don’t have a physical branch and it works only via online systems. They have quicker services in approval processes and are contacting customers via their apps, mobile software, and social media. 

They are featured with lower fees and are more transparent with their policies and conditions. If a traditional bank tries to maximize the period of relationship with customers, a neo-bank is oriented toward flexibility and short, but effective relationships. 

Remember that neobank and digital banking systems are also different. Digital banks partly have branch locations and they’re oriented toward a large audience as well as traditional banks. They are large financial institutions, whereas neo banks are completely operating in online systems and mostly are start-ups which operating on the market for 5 years on average.

How Starbucks Is A Neo bank?

To say simply, today, Starbucks can be considered a bank. The company’s services include specialized Starbucks Card apps with specific programs, services, loyalty suggestions, etc. The main reason was to take a competitive advantage and attract more customers with more comfortable and simpler services. 

Again, they brought a new color to coffee culture and changed the daily behavior of coffee users. They also suggested free internet access to their cafes and different rewards or bonuses. 

So the traditional process of buying Starbucks coffee has changed. You don’t need to carry cash or a classic credit card. You can simply download the Starbucks Card app on your mobile, open it and get different bonuses, and buy coffee in a more comfortable and fun way. 

This neo banking system is very successful because the annual loaded amount is 10 billion USD on a program which is approximately half of the company's traditional sales. Starbucks' neo banking services encouraged more people and made the company more successful financially and organizationally.