Could Xinja be Australia’s first neobank?
Banking startup Xinja is built solely for mobile and will target tech-savvy consumers.
Fintech startup Xinja is on track to becoming Australia's first neobank, otherwise known as a challenger bank, and has already raised close to $3 million this year. The funding will help launch 5,000 prepaid debit cards to customers before expanding its product offering to bank accounts and mortgages.
Xinja will provide a banking solution for tech-savvy customers who want to be able to operate completely via their mobile phone. It will enable customers to use new accounts instantly, to see transactions in real time and to follow their money using simple virtual tools.
The government announced in its May federal budget it would reduce the barriers for new players entering the banking sector to encourage competition in the industry. This includes a move to allow smaller players with less than $50 million in capital to call themselves a bank. Worryingly, only one new banking license has been issued to an Australian startup in the last ten years.
Xinja is currently seeking licensing from the Australian Prudential Regulation Authority to expand its product offering within the next 18 months. It does not need a financial services license to issue the 5,000 prepaid debit cards.
Xinja chief executive Eric Wilson said the startup will inject some much-needed competition into the banking sector, which is largely dominated by four major players. "It's time Australia had access to a new type of bank that services their interests," he said.
"Xinja carries none of the legacy costs or system limitations of traditional banking: there will be no bricks and mortar branches, no paperwork and no cumbersome legacy technology. So it can deliver innovative, mobile-first experiences at highly competitive rates and low or no fees for customers."
"It will provide an intuitive experience and allow rapid and better money decisions without the angst. It you're trying to hit financial goals or simply manage your money better, your bank should be making it simpler and easier for you to achieve this, and this is what Xinja will do," said Wilson.