Neobanks are digital-only banking services that operate exclusively online, offering features similar to traditional banks but without a physical presence, which allows them to provide enhanced customer experiences through advanced technologies like AI. Popular examples of neobanks include Chime, Varo, Revolut, Nubank, and SoFi, each offering unique services ranging from no-hidden fee policies to cryptocurrency trading. Neobanks are gaining popularity due to lower fees, 24/7 availability, and enhanced customer support, yet they face challenges such as fraud prevention, requiring compliance with Know Your Customer regulations and advanced technology for identity verification. Fraud types like account takeovers, fraudulent new accounts, and loan fraud pose significant risks, necessitating proactive fraud detection and customer education on cybersecurity. As neobanks focus on personalized user experiences and digital identification, they aim to protect customer accounts and maintain trust while ensuring compliance with global regulations.