Neobanks – Digital Banks on the Rise
How digital banks are transforming everyday financial life in Switzerland—and what users should keep in mind regarding security, risks, and personal responsibility
Neobanks like Neon, Revolut, and Yuh are booming in Switzerland. Learn how they work, what risks are involved, and how to keep your money safe.
Neobanks are rapidly gaining prominence in Switzerland: especially among young adults, apps like Neon or Revolut are increasingly replacing trips to traditional bank branches. What once began as a technological gimmick is now an integral part of everyday financial life. However, as their popularity grows, so do the demands on security and user knowledge.
They have catchy names like Revolut, Neon, Yuh, or Zak and advertise low fees and modern apps: so-called neobanks or internet banks are being used more and more frequently in Switzerland. But what exactly are neobanks, what risks do they pose, and how can you protect yourself from them? This article explains what defines neobanks, what risks exist, and how users can protect themselves.
Index
What Are Neobanks
Neobanks are financial institutions that offer their services exclusively online. They are often pure fintech startups or standalone platforms operated by existing banks. They have no physical branches, and traditional call centers are rare. Transactions are primarily handled via apps, online platforms, or, in some cases, by mail.
Since neobanks do not operate a branch infrastructure, they save on costs and can offer more favorable terms, such as advantageous foreign exchange rates or lower transaction fees. Additionally, neobanks sometimes stand out from traditional financial institutions due to greater user convenience. Opening an account, setting up the app, and making transactions can usually be done in just a few minutes.
Studies show that the differences between small and large banks are continuing to widen. Many neobanks have substantial investment capital, allowing them to differentiate themselves more strongly from the competition. Traditional banks are increasingly offering hybrid models to remain competitive.
Neobanks shift part of the responsibility from the institution to the customer. Security is increasingly becoming a matter of competence. Surveys show that customers no longer enjoy visiting bank branches as much, preferring instead to handle everything online from home. Especially among the younger generation (ages 18 to 25), the most popular payment method is the smartphone [1], which neobanks support.
Neobanks do not offer the full range of services that traditional banks do. For example, they have varying offerings such as investment options, available currencies, international transfers, or cash withdrawals. To further reduce costs, there is an increasing reliance on the use of artificial intelligence (AI). This leads to greater automation and further limits customer contact. This trend is particularly evident in Africa and Asia [2].
The best-known banks are Zak, Yuh, Neon, and Revolut. Zak is a service offered by the Swiss bank Cler. Yuh is a partnership between PostFinance and Swissquote. Neon is also based in Switzerland and is a partner of Hypothekarbank Lenzburg [3]. Revolut is based in the UK and is independent.
Risks and Issues with Online Banks
Users pay for the convenience and comparatively favorable terms in part by the fact that it is often more difficult to get in touch quickly if they have questions or problems. This can lead to inconveniences, particularly with foreign neobanks. For example, a payment may be blocked if the geo-impossibility check fails.
There is also the risk that users will rely exclusively on this option. This can have unpleasant consequences if technical problems or unexpected restrictions arise.
In general, neobanks carry similar risks to traditional online banking. Among the most significant are phishing, malware, and identity theft, where criminals attempt to steal login credentials (passwords, PINs, TANs) to gain access to the account. This often occurs through fake emails (phishing), manipulated websites, Trojans, spyware, or new methods such as quishing (manipulated QR codes).
Additional risks arise from using unsecured public Wi-Fi networks and from unprotected behavior (e.g., saving login credentials in the browser). Another factor specific to neobanks is their heavy reliance on smartphones, which offers attackers additional opportunities to strike.
Main threats in detail:
- Phishing (data theft): You receive fake emails or text messages purporting to be from your bank, containing links to fake websites that resemble your login portal. If you enter your data there, it will be stolen.
- Malware: Trojans, infostealers, or spyware can infiltrate your device to intercept your input or manipulate transactions, often through outdated software or untrusted apps.
- Quishing (QR code fraud): Scammers send fake messages with QR codes that lead to malware or request login credentials when you scan them.
- Unsecure networks: Using online banking on public Wi-Fi networks without a Virtual Private Network (VPN) increases the risk of data being intercepted.
- Smartphone dependency: If your device is lost or compromised, accounts can easily be attacked if a strong PIN or biometric authentication isn’t used.
How to protect yourself from these risks
Since support at neobanks is often limited, prevention is particularly important. Here are some points that deserve special attention.
- Transfer only as much money to your neobank account as is currently necessary, and do not permanently link a credit card for reloading.
- Always use at least two payment methods and also consider offers from Swiss financial institutions with better support.
- Enable security features such as 2FA, transaction signatures, push notifications, and custom card locks; use virtual disposable cards whenever possible.
- Never share your login credentials and do not click on links carelessly—be especially cautious with emails, text messages, or phone calls.
- Avoid public Wi-Fi for banking transactions (or use a VPN) and secure your smartphone with a lock screen and the latest updates.
- Report irregularities immediately, end suspicious sessions, and keep your bank’s emergency number handy.
Conclusion
In Switzerland, neobanks have evolved from an innovative niche solution into an established alternative. They stand out primarily for their low fees, high user-friendliness, and the ability to conduct banking transactions anytime and entirely digitally.
At the same time, the exclusively digital approach also carries risks. Limited customer support, heavy reliance on smartphones, and threats such as phishing, malware, or identity theft require a high degree of personal responsibility.
Neobanks are therefore less suitable as a sole banking solution and more as a supplement to a traditional bank account. Used correctly, they offer a modern, flexible, and cost-effective form of banking—provided that one manages the risks consciously.
Sources:
[1] https://www.bearingpoint.com/de-ch/insights-events/insights/digital-banking-2025/
[2] https://ailleron.com/de/wissenswertes/banking-trends-2025/
[3] https://wise.com/ch/blog/beste-online-bank-schweiz
Author: Lukas Nyffenegger, Research Assistant, “eBanking – aber sicher!” team (www.ebas.ch), Lucerne University of Applied Sciences and Arts – Computer Science
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