Digital banking: Compare digital banks in Australia

Learn how a digital neobank could benefit you and how you can get started with one today.

Like many other parts of our lives, banking is becoming increasingly digital. Australia has a number of new digital banks, also called neobanks, promising to revolutionise the financial industry through the use of world-class technology and digital services.

Learn about some of Australia’s new digital banks in this guide and how a completely digital bank is different to an existing bank that offers digital services and platforms.

What is a digital bank?

Like the name suggests, a digital bank operates digitally, usually from an app, rather than from a physical branch or office. A digital bank is a fairly loose term; the correct industry name for these banks is a neobank.

A neobank is a completely digital bank that doesn’t use any existing legacy systems to operate. This means the bank doesn’t use any physical infrastructure or digital operating systems that are already being used by existing financial institutions in Australia. The technology used by these neobanks is developed from scratch.

Compare digital banks in Australia

Updated December 13th, 2018
Name Product Product Status Pros Cons
Available

  • Spending insights

  • Bill detection and reminders

  • Available on Apple Pay, Google Pay, Fitbit Pay, Garmin Pay


  • Card delivery time

  • International ATM fee

A transaction account designed for your smartphone with spending categorisation, no international purchase or ATM fees and a round-up feature to help you save.
Available

  • Convenience

  • Security

  • Spending analysis and categorisation

  • Travel support


  • Card limits are restrictive

  • Apple Pay and Touch ID not supported

  • Android not yet available

  • Cannot receive salary into

A prepaid Visa card that offers simple, low-cost global spending. Benefit from spending categorisation, low fees and security features.
Pre-beta

  • Low-cost global spending

  • Buy, hold, trade and transer multiple fiat currencies plus cryptocurrencies

  • Receive spending notifications and insights into your transactions

  • Insurance options


  • Low fee-free ATM limits

  • No free express delivery

  • No interest earned on savings

A convenient global spending account that lets you hold multiple currencies, spend and transfer money in over 150 currencies and benefit from innovative money management features.
Available

  • Unlimited multiple accounts

  • Free withdrawals

  • Bonus introductory rate of 2.75% p.a.

  • Option of roundups


  • No information yet on conditions for introductory rate

An innovative savings account that's tied to your goals. Create multiple accounts and automatically round up your spending from your Up transaction account.
Pre-beta

  • Low-cost spending in Australia and overseas

  • Hold and split bills in up to seven currencies

  • Access live chat 24/7 and lock and unlock your card in the app

  • Spending tracking and insights


  • Product is not available yet

  • No savings account option

A convenient, low-fee account that hold sup to seven currencies and charges no account-keeping fees.
Available

  • Bank-level security

  • Use your card at millions of locations, including online

  • Student benefits


  • Not a transaction account

  • No savings account option

  • Campus availability

A prepaid spending account designed for students. Benefit from low fees, spending insights and rewards tailored to how and where you spend.

Compare up to 4 providers

What other digital banks will be launching in Australia?

There are a number of digital banks lining to start offering products in the next year. This may be because they are yet to receive a banking licence or their products are still being developed. Some of these banks include:

  • Volt Bank. Volt Bank was the first to receive the new restricted Authorised Deposit-Taking Institution (ADI) licence. While yet to formally announce specifics for its products, we are expected to see a savings account, term deposit, a transaction account and loans sometime in 2019.
  • 86 400. This new bank is named for the number of minutes in a day and has applied for a restricted ADI licence. It is backed by Cuscal and expected to release a transaction account and savings account in 2019.
  • Archa. Archa has applied for a restricted ADI but will be working with a regulated ADI at launch. It is expected to launch a multi-currency transaction account, a savings account and international money transfers.

What's the difference between a digital bank and a traditional bank that's available online?

Many banks in Australia appear to be digital banks since they don’t have branches and are focussed on developing top quality mobile banking apps for their customers. However, just because a bank doesn’t have branches and offers a range of digital products and platforms doesn’t mean it’s a digital bank or a neobank.

A bank offering Apple Pay isn't necessarily a digital bank.

Many banks offer contactless payments via digital wallets like Apple Pay, Google Pay and Samsung Pay. Westpac is the oldest bank in Australia and it offers Google Pay to its customers, yet Westpac isn’t considered to be a completely digital bank.

Similarly, if a bank offers a top-notch mobile banking app, Internet banking services, cardless cash facilities and digital savings tools, this doesn’t automatically mean it’s a digital bank either. Remember, a 100% digital neobank is one that doesn’t use any existing banking systems or infrastructure.

ING, ME and UBank aren’t 100% digital banks.

Many people refer to ING and ME as digital banks because they don’t have any physical branches. However, these banks aren’t neobanks because they rely on existing banking infrastructure.

For example, ING is owned by multinational Dutch bank ING Group and relies on its infrastructure and legacy systems to operate. ME is owned by more than 20 industry superannuation funds, including AustralianSuper and Hostplus. Similarly, UBank is actually owned by NAB, one of the Big Four banks in Australia, and relies on a lot of NAB’s existing operating systems to function.

Are digital banks safe?

Digital banks need to have the same banking licences and approvals as existing Australian banks before they’re able to offer products and services to consumers. These new banks will be regulated by the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investment Commission (ASIC) in the same way that existing banks are regulated.

Your deposit of up to $250,000 with an Australian authorised deposit-taking institution (ADI) is protected by the Australian government. This means if something were to happen to the bank, your money (up to this amount) would be safe. Note that some of the digital banks mentioned in this guide are not yet considered banks (they aren’t ADIs) because they’re waiting on their banking licences from industry regulators.

How to get started with a neobank

If you’re interested in joining one of these new neobanks, you can join their waitlist by visiting their website. When they launch products, those on the waitlist will be the first to know and the first to receive access to these new products.

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Savings Account Offers

Important Information*
ING Savings Maximiser

Maximum Variable Rate

2.80

Standard Variable Rate

1.00
RaboDirect High Interest Savings Account

Maximum Variable Rate

3.05

Standard Variable Rate

1.80
AMP Saver Account

Maximum Variable Rate

2.55

Standard Variable Rate

2.10
Bankwest Hero Saver

Maximum Variable Rate

2.60

Standard Variable Rate

0.01

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