Volt Bank is one of the neobanks performing its best to transcend the challenges that the coronavirus or COVID-19 crisis has brought. It is one of the up-and-coming financial technology companies whose leadership has selected to remain bullish and is passionately looking forward to winning more clients. Neobanks are a cluster of financial service providers granted banking permits over the past one and a half year as of June 2020. These digital banks are trying to muscle into the banking and finance industry. The Big Four Australian banks control 80 per cent of the banking and finance market in Australia. They are the Commonwealth Bank of Australia, Westpac Banking Corporation, Australia and New Zealand Banking Group, and National Australia Bank. With this existing state of affairs, Volt Bank is attempting to alter the status quo.
Repercussions of the Coronavirus Crisis to Neobanks
The coronavirus pandemic severely affected all aspects of human life, most notably human wellness and livelihoods. Besides, it has brought a grim climate, shrouding Australia’s newest financial service providers. In recent months, neobanks have struggled with the national economy contracting sharply. Also, capital has become more challenging to obtain. Neobanks had to contend with the recession affecting the younger workers who are their target clients, too. The ongoing economic downturn in Australia has had a disproportionate repercussion on these potential customers of the new banking players. These young people are facing a bleaker economic environment because of massive unemployment in various industries, such as tourism and hospitality sectors.
Grant Halverson is a financial services executive. He believes that there is an imminent crisis for the neobanks. With this pessimistic prediction, Halverson remarked that he does not believe all of these new, digital financial services providers would survive. The McLean Roche former chief executive officer explained that neobanks would find it difficult to carry on with their operations due to the little assortment in revenue. Second, he cited that these financial technology firms possess a narrow range of offerings. Finally, Halverson said that neobanks are trying to win millennials as clients. This scenario is problematic because the economic downturn’s worst victims are these young people.
Volt Bank is one of the neobanks which Halverson’s perspectives allude to, along with Xinja and 86 400. These neobanks have not yet reached profitable territory as of June 2020. They are attempting to win customers by offering cool digital features and sharp costing. Furthermore, an essential goal for Volt Bank, 86 400, and Xinja is reportedly the $1.7-trillion mortgage market. However, they have to deal with large banking institutions that are competing harder on value. The anticipated sharp deceleration of credit expansion is another impediment, which the coronavirus crisis unleashed. Nevertheless, despite these obstacles, Volt Bank’s Steve Weston is tapping into having a positive or optimistic attitude for which plenty of challenger or startup banks are famous. He has maintained that his financial technology company can utilise the COVID-19 dilemma to their advantage.
Neobank Co-Founder’s Upbeat and Progressive View for the Challenger Bank
Steve Weston is one of the founders of Volt Bank. In June 2020, he acknowledged that the coronavirus crisis had forced the neobank to postpone some of its plans. Volt Bank will then have to push back its share market listing until 2021. Plus, instead of rolling out the lending offerings of the digital bank this year, this activity had been deferred and would take place in the coming year. Volt Bank has also rescheduled its $50-million capital raising plan to 2021.
Weston confirmed that he had accepted the fact that the coronavirus crisis has brought the most substantial economic shock since the Great Depression. However, he is bullish, insisting that this once-in-a-century global emergency crisis has a silver lining. The Volt Bank co-pioneer cited that the possible target market of the financial technology company has grown as consumers spend more of their time on the Internet. Weston confirmed that he had felt frustrated for his challenger banking firm due to the COVID-19 pandemic. But he pointed out that he also feels excited. Weston relayed that he is confident that Volt Bank would emerge from the coronavirus pandemic successfully. Although its competitors would get bogged down with unfavourable debts, the digital banking executive said that his neobank would survive with a clean balance sheet.
How One of Australia’s Challenger Banks Is Modifying the Banking Industry
Volt Bank is one of the promising players in the universe of neobanks in Australia. It is a component of the technology-led financial services revolution. Volt Bank and its rising rivals offer more insights, customisation, and state-of-the-art payment innovations to Australian consumers. All of these services and perks are inside a single smartphone application. In October 2017, the founders of Volt Bank, including Weston, established the digital bank in Sydney. The challenger banking company advanced fast despite being a fledgling service provider. Then, in May 2018, Volt Bank became the first-ever neobank in the largest country in Oceania to get the Restricted Authorised Deposit-Taking Institution or RADI permit from the Australian Prudential Regulation Authority. Then, in January 2019, the neobank became the first digital bank to obtain a full license to operate as an Authorised Deposit-Taking Institution or ADI. Volt Bank is similar to other Australian banks when it comes to product offerings and regulation. It can offer borrowing choices, such as home loans and personal loans down the track. Plus, the Australian neobank can take deposits from clients through savings and bank accounts.
Based on its official website, Volt Bank desires to help people “the right way.” Its administrators target to change or reverse some of the conventional banking practices. Moreover, they aim to provide their clients with straightforward encounters and authentic transparency. According to Volt Bank’s portal, their starting point is the act of moving away from the tactics of the traditional banking institutions. These strategies detrimental to consumers include:
1. Making consumers feel like a mere statistic;
2. Keeping loyal clients on worse deals than new ones;
3. Hiding charges;
4. Utilising baffling language; and
5. Not rectifying errors.
Volt Bank desires to assist consumers in being in a much better position, as per its website. It is doing its best to achieve this goal through the creation of solutions, services, and experiences that, indeed, make consumers’ lives of higher quality. The financial technology player believes that altering conventional banking practices is the right technique to deliver better services to their customers. Plus, it is attempting to eliminate the consumer inconvenience of opening savings and bank accounts with plenty of conditions. Volt Bank wants to aid their clients in paying down their debts more rapidly as well.
Neobanks may be facing difficulties in attracting consumers and launching new offerings this year because of the coronavirus crisis. But as the technology-savvy younger generation takes over the consumer market fast, it is highly likely that these digital banks will thrive in the long run. After all, these financial service providers operate unconventionally and innovatively. They lean more towards the younger generations who have a different perspective. These clients are changing the world view, putting a premium on valuing savings, living in a minimalist way, and caring more for their environment. With these realities, the likes of Volt Bank can expect rosy years ahead. It is because there would be a robust demand for their technology-oriented products that aid digitally-savvy people in saving more, spending less, and achieving a better and more meaningful life.