The top execs of Neobanks are shocked at the huge demand they are receiving from potential customers. To put the demand into perspective, one Neobank – Xinja – has amassed an impressive $100 million in deposits in a time frame of just 19 days.
The challenger banks, which are 100% digital, are collectively signing hundreds of customers up to their services each day, bringing huge competition to the big four.
Speaking on the huge amount of deposits received, CEO of Neobank Xinja, Eric Wilson, said “It’s very exciting and probably a little terrifying. It’s a massive and overwhelming response.”
On Wednesday last week, Xinja had 23,000 accounts from 15,500 customers. Mr Wilson said that these totals bring them close to their yearly goal of achieving $120 million in deposits already, labelling the response as “remarkable.”
Fintech Australian Chairman, Alan Tsen, called Xinja’s success so far “incredibly impressive.”
“More broadly, I think this is just the beginning. I believe we’ll see consumers further embracing neobanks as their primary chequing account in the coming years,” he told AAP in a text message.
It’s not just Xinja, other neobank execs are also seeing the surprising demand, something that incumbent banks did not believe would happen.
In December we covered the story on how neobank, Volt, had a waitlist of 40,000 people ahead of its launch in early 2020, following its announcement of a base interest rate of 2.15 per cent on savings.
Xinja also offers a competitive interest rate, of 2.25 per cent, on savings. However, Mr Wilson said this clearly wasn’t their only attractor, as about half of customers hadn’t even opened a savings account with them or had bothered to fund it if they did.
His opinion was that many customers were simply drawn by their status as the only independent Neobank open to the general public. Neobank only really landed on The Australian scene two years ago, so this could for sure be the reason.
Chief executive of Volt Bank, Steve Weston, said that while the bank was still taking customers off its wait list – and not yet open to the general public – it had still received over $10 million in deposits.
Neobank Up!, which is a partnership between Melbourne-based software company Ferocia and Bendigo and Adelaide Bank, launched 15 months ago and has said the response to their launch has “gone absolutely out of control.” This is according to co-founder Dom Pym.
They chose not to disclose deposits figures, but Pym said its interest dwarfed those of all other neobanks combined.
Reportedly they have over 185,000 customers and have been adding 500 to 1,000 customers each day; Pym commentated saying “I think we’re just at the beginning of our journey.”
Up! has also just announced partnership with both Afterpay and Transferwise, as well as setting up personalised PayIDs for receiving payments.
Judo Bank, which is business-focussed, said that in January alone they had $124 million in deposits accumulated, with another another $583 million in wholesale deposits from financial institutions.
“Given we were only granted a full banking license about nine months ago, we are delighted to have smashed the $1 billion mark in deposits despite very limited marketing,” head of deposits Patrick Nolan said.
It’s clear to see the growing popularity of Neobanks and Dynamic Business will be bringing you further updates on the landscape this year.
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