Digital bank 86 400 receives full banking licence, skipping the restricted licence

86 400 is the second neobank to be granted a full banking licence, following Volt Bank which received its licence in January.

Local digital bank 86 400 has today received its full banking licence from the Australian Prudential Regulation Authority (APRA), meaning it can now officially call itself a bank, launch products and accept unlimited consumer deposits. 86 400, the name representing the number of seconds in a day, is the second digital bank to receive a full Authorised Deposit-Taking Institution (ADI) licence after Volt Bank was granted its full licence in January.

The full licence means both 86 400 and Volt Bank can accept unlimited deposits from consumers and are regulated in the same way as any other bank in Australia, including the Big Four.

CEO Robert Bell said, "This has been an incredibly thorough process and we've had every element of our business stress-tested to confirm that we are as robust, secure and safe as any bricks-and-mortar bank. The only thing remaining is to bring 86 400 to market, which we're now very close to doing."

Interestingly, 86 400 decided to bypass APRA's restricted licence and go for its full licence instead. The restricted licence was introduced by the government and the regulators as a kind of "training wheels" for banks, allowing new banks to accept up to $2 million in deposits and test their products for two years before going for their full licence.

The restricted licence is a form of stepping stone on the path towards a full ADI licence. Volt Bank was the first to receive the new restricted banking licence back in May last year, followed by Xinja in December. Xinja is yet to receive its full banking licence but says this is in the works. Under its restricted licence Xinja has successfully launched a prepaid card and app, while Volt Bank is yet to launch any products.

86 400 first announced its plans to launch in Australia and challenge the Big Four back in June last year. One year on, and the startup is now free to operate as a bank and accept unlimited deposits thanks to the new licence. The bank says it will initially launch a transaction account and a savings account.

Unlike traditional banks, 86 400 is technology led and built to operate entirely on mobile. CEO Robert Bell has said many times over the past year that 86 400 will put the consumer first, using the customers' own data to offer them real banking solutions that are beneficial to their financial lives. One example is if a customer has a $5,000 credit card debt but also has $10,000 sitting in a high interest savings account, they'd be able to look at that data and suggest that the customer uses the money in their savings to pay off their credit card bill. Something a traditional bank would never do.

86 400 says the bank will launch with a suite of low-cost, intuitive products that offer real-time payments via Osko, competitive savings rates and contactless payment options including Apple Pay, Google Pay, Samsung Pay and more. Consumers can join the waitlist for the app via 86 400's website, to be among the first to be able to download it when it's available on the App Store and Google Play soon.