This study assessed the impact of digital neobanks on the future of traditional banking in Tanzania. The specific objective pursued by the study was to assess how digital services have led to a decline in the number of customers visiting banks, to assess how digital services have influenced the decline in the usage of checks by bank customers and to assess how digital services have led to a decline in the number of cash withdrawals at counters and ATMs. A mixed-methods research design was used based on CRDB, NMB and NBC Banks in Dar es Salaam City of Tanzania. A stratified random sampling technique was used to select three segments of 210 individuals in the sample who were 201 bank customers, 3 Bank managers and 6 bank employees. The data was collected by structured surveys and in-depth interviews and analyzed by statistical tools and thematically respectively. The findings revealed that the use of mobile banking reduced visitations to bank branches for financial services. Also, digital banking offered more a convenient way of accessing and making banking and financial services. Again, the use of cheques at CRDB bank, NMB bank, and NBC bank had declined due to digital payment methods. Moreover, ATMs were being used less due to mobile money services and high preferences towards digital banking over traditional banking services. In light of the obtained findings, this study offers useful suggestions that may enable the traditional banks to cope with the threat posed by digital neobanks and enhance customers’ satisfaction. Foremost, traditional banks should leverage advanced ICT devices to ensure more convenience of their services, particularly improving accessibility to and performance of banking and financial services among customers. Secondly, traditional banks should lower fees charged on mobile banking and internet banking, specially making the fees below those of digital neobanks on similar or related services. Third, traditional banks should ensure more innovations, especially searching for and introducing new products and services and new ways of serving customers in all touch points.
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