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Xinja: “They’re watching us like hawks”

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The neobank on designing products when your customers have skin in the game

Australia's new neobanks are generally after the same thing: to change the way people do their banking. However, to do this, they need customers and funding. And they are all going about this in different ways.

For example, digital neobank Xinja, one of the first to announce its intentions to get Australia's new restricted authorised deposit-taking institution (ADI) licence (which it has now received), built up its customers before getting its licence by offering a prepaid card and app product coupled with clever marketing. During its first year of operation, it completed two equity crowdfunding raises, the second of which raised $500,000 in under nine hours. Speaking at a recent event in Sydney, Xinja's chief marketing officer Camilla Cooke said it was the most intense part of going to market.

"We've got two and a half thousand retail investors. Now, they are particularly interested in the products we are going to deliver, and what they are going to be like, and they are watching us like hawks," Cooke said.

"They are our greatest advocates and probably our toughest critics because they've got skin in the game. But the idea is again, that there's no reason why if Xinja does well, that the customer shouldn't benefit."

Cooke said that Xinja has based a lot of what it's doing on UK challenger bank Monzo.

"What it's allowed us to do is to get a product to market quickly and then ask people to help us redesign it from a marketing perspective," she said. "Yes, it's a great way to engage with people, but it's also generally a great way to do product design. You get it out to market and you get people to tell you what it's like."

Cooke went on to say that a big part of being a new player in the market is gaining the customer's trust, but that "trust" factor is not exactly what people think.

"Everyone is underwritten now to the tune of $250,000, it doesn't matter if you're CommBank or Xinja, the fact is if we went bust or CommBank went bust, the government would give you $250,000 back," she said, referring to the licencing framework established for new banks which provides consumers with the same protections as if they deposited money with a big bank.

"In a way the 'do I trust you to look after my money' is kind of moot. They're not going to lose your money."

She went on to explain that Xinja is more concerned with data.

"Probably the most burning one is 'do I trust you not to lose it or to get hacked'," she said. "I think a huge part of that is, 'do I trust you to use my data to benefit me rather than to benefit you?' "

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