QHOW WILL NEOBANKS DISRUPT THE MARKET IN 2019?
If Uber has taught us anything, it’s that even the most regulated industries are still prone to digital disrupters. With the first restricted, authorised deposit-taking institution (ADI) licence being issued to Volt in 2018, and a line-up of other players such as Xinja and Up waiting in the wings, 2019 looks like the year when neobanks will start making their mark in Australia.
With digital platforms built from the ground up, neobanks are attempting to revolutionise how consumers interact with their finances, promising to remove friction from everyday transacting and providing consumers with lower-cost products than their competitors.
To deliver on these promises, neobanks will need to achieve scale, which under a restricted ADI licence could pose a serious challenge, especially when competing with nearly 100 other ADIs also battling for a slice of the deposits and lending markets.
But with neobanks’ digital-first approach, it’s easy to imagine that there is a consumer segment that will see plenty of appeal in this. Whether there is enough appeal to get them to change banks, only time will tell.