back Back

5 Australian Neobanks that are changing the banking industry

By Edil Corneille

July 17, 2020

Share

bank, FinTech, neobank, smartbanks, challenger banks, AsiaCOVID-19 has accelerated digital acceptance among customers for their banking requirements with social distancing being the current norm. Neobanks, also called smartbanks, are digital-only banks with no physical bank branches. These challenger banks have been presenting an alternative to the big 4 banks in Australia as well as other traditional financial institution incumbents.

Neobanks do not face legacy technology and outdated processes impediments which are generally the challenges of financial institutions. The smartbanks are here to save the day from bloated incumbents who may have taken their customers for granted for way too long. Here are the 5 important digital-only neobanks that are here to stay:

86 400

Sydney-based smartbank 86 400 has revealed that it is entering its next phase of growth as it completes its rollout of ‘everyday’ banking products and features. The digital bank will now also focus on delivering even greater insights to help customers take control of their money which is especially significant in the COVID-19 times. Having moved through its pilot phase late last year, the mortgage side of the business will be announcing a major new partner very soon which will supercharge progress towards its $2 billion target by the end of 2021.

86 400 will soon begin a Series B capital raise by continuing to work with Morgan Stanley, with strong early interest from sophisticated Australian and international institutional investors. The smartbank closed a Series A round in April, raising $34.5m and taking total capital raised to $90m.

Judo Bank

In May, this Southbank-based bank raised $230 million in fresh equity, thereby valuing it to push through $1 billion and giving the neobank a unicorn status. The bank has even been focusing on support to SMEs in the country. In April it secured $500 million in investments from the government to help provide loans to small businesses. It was announced that an initial amount of $250 million will be invested by the government into the bank’s lending warehouse through the Australian Office of Financial Management’s (AOFM) Australian Business Securitisation Fund; and the remaining investment through the government’s Structured Finance Support Fund (SFSF).

Up

With headquarters in South Melbourne, Up was launched in 2018 in partnership with Bendigo and Adelaide Bank. The bank has over 20,000 customers, making it a good option for tech-savvy individuals who are not afraid to use digital means for their financial needs.

Volt

Founded in 2017, the Australian bank received its first ‘restricted authorized deposit-taking institution’ (RADI) licence in May 2018 from the Australian Prudential Regulation Authority (APRA). Volt raised $70 million in January, bring the total funding of the bank to $100 million and thereby valuing it at $285 million.

Xinja

In March, Dubai-based World Investments (WI) announced an investment of $433 million in the Sydney-headquartered digital bank over the next 24 months. Xinja has been tapping cloud technology to improve the experience for customers in their interactions with the neobank. Customers can avail information with better access, ultimately transpiring to a better banking experience.

Founded in 2017, Xinja has more than over 28,000 customers and $450 million in deposits as of now. The company’s banking platform leverages the speed, agility and automation of the cloud to increase the security and trust levels.

Previous Article

July 17, 2020

ACI Worldwide integrates digital overlay services for real-time payments modernization

Read More
Next Article

July 17, 2020

Trust & Will & Fifth Third Bank partner to enhance focus on financial health

Read More






IBSi FinTech Journal

  • Most trusted FinTech journal since 1991
  • Digital monthly issue
  • 60+ pages of research, analysis, interviews, opinions, and rankings
  • Global coverage
Subscribe Now

Other Related News

February 05, 2025

Aldermore Bank taps Temenos to modernise business savings

Read More

February 04, 2025

ARIE Finance taps SaaScada to simplify international payments for businesses

Read More

February 04, 2025

Fimple accelerates global expansion with $12m Series A funding

Read More

Related Reports

Sales League Table Report 2024
Know More
Global Digital Banking Vendor & Landscape Report Q4 2024
Know More
NextGen WealthTech: The Trends To Shape The Future Q4 2023
Know More
IBSi Spectrum Report: Supply Chain Finance Platforms Q4 2023
Know More
Treasury & Capital Markets Systems Report Q4 2024
Know More