The rise of neo-banking in India has redefined the financial services landscape by offering fully digital, technology-driven and customer-centric solutions. This study examines the neo-banking revolution in selected southern districts of Karnataka with a focus on customer trust, usage patterns and challenges. Using a descriptive and analytical design, primary data was collected from 121 respondents across Bengaluru Urban, Mysuru, Tumakuru, Mandya and Hassan through structured questionnaires. Statistical tools such as ANOVA, regression analysis and post-hoc tests were applied to examine the role of demographic factors such as age, income, education, and place of residence on customer perceptions and behaviours. Empirical results indicate that age, income and residence are not significant variables on the awareness and adoption levels and trust, whereas educational qualification is core variable impacting future adoption. Trust is raised as a critical element when it comes to continued engagement; however, there remain concerns regarding cybersecurity, data privacy and difficulty of use. The findings support the notion that adopting neo-banking is non-discriminatory and embraced more by factors such as convenience and penetration into digital technology than socio-economic positions. The paper would help policymakers and finance institutions understand the digital trend and shape policies to support their agenda when it comes to digital trust, usability and financial inclusion in semi urban and rural districts of Karnataka