Volt Bank granted Australia's first restricted digital banking licence

Steve Weston | May 07, 2018

A new era of banking competition set to arrive with volt bank granted first restricted banking licence under Federal Government innovation agenda  

Monday  May  7,  2018:  The  Australian  Prudential  Regulation  Authority  (APRA) today granted a restricted authorised deposit-­taking  institution  (RADI) licence to volt bank limited, paving the way for greater competition in Australia ’s banking sector.    

volt bank is the first bank to have been granted a RADI licence and the first new retail-­focused bank licensed since the early 2000s.    

volt  bank  CEO  Steve  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,” Weston said.    

volt will be a digital bank that aims to support Australians on their financial journeys.  Whether switching from an incumbent provider,  receiving  real-­time insights on spending habits or finding a competitive home loan, every experience will  be  mobile-­led  and  customer-­focused.  

The volt banking platform is set to include:    

• 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  

• Highly  competitive  savings  and  term  deposit  account  interest  rates  and  straightforward  transaction  account  fees,  enabled  by  a  low  cost,  digital-only  structure    

• Leading  edge  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.  

• Highly  competitive  foreign  exchange  rates  

Subject to volt bank transitioning to a full  ADI  licence, saving accounts, transaction accounts, term deposits and foreign exchange will be the first products it will make available to customers.  This will be followed by personal loans,  mortgages, credit cards and in the longer term, small business banking products.     

Mr Weston said UK bank disrupters,  like Monzo and Revolut, have had a significant impact in their home markets, securing hundreds of thousands of customers disaffected with old banking products and old banking experiences.  

Mr Weston is volt bank’s co-­founder  and most recently held the position of  CEO  of Mortgages and Managing Director of Retail Lending for Barclays  (UK).  He and co-­founder  Luke Bunbury worked together at St  George Bank and Challenger  Financial  Services Group in the early 2000s where they both held senior management roles.  

They oversee a team of over  35  employees with deep banking,  technology, data, and marketing expertise.    

Personalisation and easy account switching  

Through market-leading data analytics, volt bank will provide its customers a clearer picture of their financial position and be better informed to overcome their financial challenges, rather than be sold ‘one-­size-­fits-­all’  solutions.    

“On an opt-­in  basis, volt bank will show customers if they can save money on monthly expenses such as utilities or insurance and monitor daily spending to help customers stay within their budgets.  At the same time, customers will be able to view their bank and credit card account balances, interest rates and transaction history across all accounts regardless of which financial institution they are held with, delivered via one  easy-­to-­use  interface, ensuring complete transparency,”  Mr Weston said.  

“volt bank will remove the archaic processes associated with opening an account and will provide customers with the ability to switch their billers, payees and direct debits from another bank to volt bank almost instantly.  We expect these initiatives to be further supported by the Open Banking reforms that come into effect in 2019,” Weston said.     

Competitive interest rates 

volt bank’s launch products will feature highly competitive deposit and lending rates, appealing to the one million Australian customers who move banks every year to get a better deal.  

“Incumbent banks have grown complacent and benefited from the inertia that comes from the difficulty of changing banks.  Recent events have demonstrated that the big banks have had it too good, for too long.  volt bank must earn its success but believes it will have the digital products, capability, and experience to stimulate meaningful competition,”  Mr Weston said. 

Volt equity funding  

To date, volt has raised  $15.7 million in equity capital via three funding rounds.    

“We will continue to assess our funding requirements in line with our growth and are taking our expansion strategy one step at a time.  Our  immediate  focus  is  building  a  market  leading  digital  banking  platform while  remaining  fully  engaged  with  APRA  and  other  regulators  to  demonstrate  our  product  and  systems  capabilities  meet  the  criteria  to  transition  to  a  full  banking  licence.”  Mr Weston said. 

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