- Australia’s ‘first neobank’ has started issuing accounts to its customer waitlist, months after its competitors began launching.
- CEO and co-founder Steve Weston told Business Insider Australia the longer lead up has been the result of a partnership model which will see Volt leapfrog its competitors to become “a much bigger bank”.
- With a public launch pencilled in for February, Australians can expect to see the neobank and its various products to begin popping up throughout 2020.
- Visit Business Insider Australia’s homepage for more stories.
Volt Bank is finally here.
The neobank has begun rolling out its very first savings accounts to around 40,000 interested Australia.
“We’re been testing our savings accounts for a few months with staff and now we’re giving it to those people on our waitlist,” co-founder and CEO Steve Weston told Business Insider Australia.
“Like any new company with new products, you test, you take feedback from your customers, you iterate, and then you keep opening up the door a little wider until we launch into the public market in the early months of next year.”
Specifically, Weston and the team are eyeing a long-anticipated public launch in February. Customers who sign up will get an interest rate of 2.15% – one of the highest currently on offer and one that importantly comes without any strings attached.
“I think there is no reason why banks just can’t get a decent interest rate without making customers jump through hoops,” Weston said.
Instead, many Australian banks offer introductory bonus rates that only apply for a few months before customers are paid a measly base rate and no more.
“Banks and bank CEOs all talk about wanting to do the right thing by customers but can they tell us what percentage of savings account customers actually get the higher interest rate each month? My suspicion is we won’t ever hear that statistic because it is so poor.”
While Volt was the first Australian neobank to receive its full banking licence, it’s become the last to actually go public after Xinja and 86 400 both went public in September. The move is a deliberate, Weston says, seeing Volt as a different beast to the rest of the field.
“We are building a very different bank and doing more than just offering customers a bank account via smartphone. A very large percentage of our business will come through our partners.”
While Volt hasn’t yet announced who exactly those partners are, Weston says when it does, people will understand why the neobank has taken its time going to market.
“The other neobanks have done a really good job regarding technology and acquiring customers but the question is, when will they ever generate a profit? Because the sort of business they’re doing today is not profitable,” Weston said.
Instead, Volt will look to emulate the likes of UK neobank Starling which, using a similar partnership model, is looking to break even next year, well ahead of its ‘faster’ peers.
“It’s a more sustainable model. That’s not to say 86,400 or Xinja’s model is awful, they’re not, they’re just different. With this model, Volt bank will just become a much bigger bank using our partners.”
That’ll be put to the test when Volt launches to the public in February and begins rolling out to its partners soon after.
“We’ll acquire customers directly as well as through partners like PayPal and other really large well known Australian companies who want to offer banking products to customers, but don’t want to become a bank themselves. We’ll offer cash management accounts via them in March and then begin rolling out transaction accounts in April or May.”
From then, Volt will move into lending with an eye to offering mortgages in the second half of 2020 via mortgage brokers, like 86 400.
“By this time next year, we will have launched all of the consumer deposits and loans with the exception of credit cards which we won’t do.”
With the addition of small business lending in 2021, the neobank will be able to offer everything that a major bank does, with plenty of bells and whistles they can’t.
“We’re going to show Australians how to get better details and give discounts at over 20,000 retailers when they pay with their Volt account. We’ll help them block their account from certain types of spending, like gambling venues or certain stores, if they have a problem spending there.”
With each of the country’s neobanks looking to release their main products next year, 2020 looks to be the time Australians finally get some true banking alternatives.
READ MORE: Xinja and 86 400 are two of Australia’s newest neobanks trying to take on the big four – but they might have more beef with each other