Australia is about to get a digital-only bank, after authorities granted a new type of licence to volt, a startup co-founded by former NAB and Barclays exec Steve Weston. Volt has become the first firm to be granted a restricted authorised deposit-taking institution (Radi) licence by the Australian Prudential Regulation Authority.
The new licence, which only launched last week, is designed to bring competition to a market dominated by four big players, enabling new entrants to carry out a limited range of activities for two years "while they build their capabilities and resources".
Volt, which has raised $15.7 million and has 35 staff, will initially offer savings and transaction accounts, term deposits and foreign exchange, before moving into personal loans, mortgages and credit cards as it transitions to a full licence.
A former head of mortgages at Barclays, co-founder Weston will act as volt CEO, promising to use state-of-the-art technology to offer a strong service and low fees. Customers will be able to tap facial recognition to open up accounts, while a slate of money management tools are in the offing.
"With no legacy systems and no branch infrastructure, we are starting from scratch and building a bank the way it should be," says Weston.
"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."
Volt is expected to be just the first of a host of new challengers to enter the Australian market, as regulators encourage digital-first competition similar to that seen in the UK in recent years.
Among them is Xinja, which has already secured regulatory approval to start offering home loans and is now hoping to get a Radi licence.