Aussie challenger Volt starts onboarding customers
Volt, the first neobank to receive an unrestricted authorised deposit-taking institution (ADI) licence from the Australian Prudential Regulation Authority (APRA) has begun onboarding some of the 40,000 in its waitlist.
Ahead of a public launch at the start of 2020, Volt has also revealed what they refer to as a ‘no catches’ base interest rate of 2.15% on savings, with no introductory period or conditions. Personal finance comparison site Mozo have described this rate as “head and shoulders above the pack”.
CEO and co-founder Steve Weston, who used to run Barclays’ mortgage operations, says: “What I find troubling is banks saying they are putting customers at the heart of what they do but that isn’t reflected in actual practice.
“As an example, banks should say what percentage of their savings account customers get the higher advertised interest rates rather than the often very low base rates. The same applies to home loan interest rates. Why is it that new customers get a better deal than loyal customers?”
Weston is challenging other banks to go up against Volt and offer competitive rates that help customers develop good financial health and providing products and services that are “free from any catches or unpleasant surprises, and which actually help consumers develop great financial habits.”
Volt are also seeking feedback and comments through their app Volt Labs so that upon launch, the bank is offering “viable, well-understood, and trusted option for everyday Australians.”
Finextra spoke to Weston in March 2019 months after the neobank recieved their license. “Australian banks thought they were better behaved than banks in other countries but in the last couple of years it has become apparent that this wasn’t the case. Like occurred in the UK, this has seen the Government intervene to introduce new competition into the banking sector in Australia.
“It wasn’t until May 2017 when the Government copied key banking competition initiatives from the UK that it was possible for Volt Bank to get a banking licence. These initiatives included the call for an open banking review.”
Weston explained that in order to form his neobank, he learned from what European challengers had done well and from what they hadn’t done so well. “The world has changed incredibly in the last few years and technology capability has come along in leaps and bounds particularly with cloud-hosting, and the cost of that technology has come down massively.
“Also, the use of data analytics and machine learning has progressed a lifetime in recent years so when starting a digital bank today, you’re making very different decisions to what you would have a few years ago. Around the world and particularly in Australia, there has been a loss of trust between banks and the community that they serve and there has been a push for more competition.
“In the UK, neobanks are getting really good customer traction. We expect the same to occur with the Australian millennial population, who research shows are the most likely millennial population of any Western country to switch banks. They won’t do what mum and dad did: have a groan or a grumble about their bank, but not change.”