Monday, 07 May 2018 11:49

Digital bank to capitalise on distrust in local banks

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The Australian Prudential Regulation Authority has granted a restricted authorised deposit-taking institution licence to volt bank limited, a digital bank that plans to initially offer a few services.

The bank claims to be the first to gain a RADI licence and the first new retail-focused bank licensed since the early 2000s. No indication was provided as to when it would start operating.

In a statement, volt bank claimed it would offer:

  • Rapid account opening enabled by smartphone facial recognition technology;
  • Quick and simple transfer of direct debits from existing accounts with other banks to a volt transaction account;
  • Competitive savings and term deposit account interest rates and straightforward transaction account fees, enabled by a low-cost, digital-only structure;
  • Financial tools that address budgeting, saving and achievement of goals;
  • Comparison functions to help customers shop around for better deals on regular expenses like electricity, gas, phone and insurance; and
  • Competitive foreign exchange rates.

The bank will be headed by Steve Weston, a former chief executive of mortgages, and managing director of Retail Lending for Barclays in the UK.

Weston said: “The team is delighted to have reached this important milestone of being the first company to receive a restricted ADI licence from APRA as part of the federal government’s innovation agenda and we will be a trailblazer in a new era of banking competition.

“volt bank will show Australians how banking can be done in a simpler and better way. With no legacy systems and no branch infrastructure, we are starting from scratch and building a bank the way it should be.

"We acknowledge we are at the start of our journey, but the trust between many Australians and their banks has been broken and the path to repair starts with new market entrants who are willing to do things differently.”

Subject to transitioning to a full ADI licence, volt bank plans to offer saving accounts, transaction accounts, term deposits and foreign exchange as its first products.

These will be followed by personal loans, mortgages, credit cards and, in the longer term, small business banking products.

Weston and co-founder Luke Bunbury have worked at St George Bank and Challenger Financial Services Group in the early 2000s where both were part of senior management.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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