volt bank receives licence from regulator
volt bank is the first Australian digital bank to receive a restricted banking licence from APRA.
volt bank, a digital bank, has today received the first restricted authorised deposit-taking institution (RADI) licence from the Australian Prudential Regulation Authority (APRA), beating rival banking startup Xinja. This decision by APRA will help to encourage more innovation and competition in the local financial services sector as more fintech players and "neobanks" pop up to challenge the traditional banks.
volt bank is set to be a completely digital bank, with no legacy systems and no branches or infrastructure. The first products the digital bank will launch include savings accounts, everyday transaction accounts, term deposits and a foreign exchange, all of which volt bank promises will offer highly competitive interest rates. A range of personal loans, mortgages and credit cards will follow these debit products. Of course, all of this is dependent on the bank receiving its full ADI licence from APRA.
As well as competitive financial products, the digital bank will also offer a range of useful lifestyle features and capabilities to help customers save more money and get a better picture of their overall financial position.
"On an opt-in basis, volt bank will show customers if they can save money on monthly expenses such as utilities or insurance and monitor daily spending to help customers stay within their budgets. At the same time, customers will be able to view their bank and credit card account balances, interest rates and transaction history across all accounts regardless of which financial institution they are held with, delivered via one easy-to-use interface, ensuring complete transparency," said co-founder Steve Weston.
"Incumbent banks have grown complacent and benefited from the inertia that comes from the difficulty of changing banks. Recent events have demonstrated that the big banks have had it too good, for too long. volt bank must earn its success but believes it will have the digital products, capability and experience to stimulate meaningful competition," said Weston.
Rival startup Xinja, which was to be Australia's first neobank, has not yet received a restricted ADI licence from the regulator, however, it is working towards this. On its website, it says it is "not a 'bank' and cannot conduct 'banking business' yet, but is working with regulators to become a 'bank' and be able to conduct 'banking business'."
In March, Xinja launched its prepaid Visa card featuring no ATM fees within Australia or overseas, and featuring tap-and-go capabilities. It also launched its linked mobile app, allowing customers to monitor the spending on their prepaid card and categorise their transactions to help with budgeting.