APRA has granted one neobank a full ADI licence with the bank skipping the route of obtaining a restricted one first.
Neobank 86 400 has been granted a full ADI licence from the regulator meaning it has skipped the neobank route of obtaining a restricted ADI and instead the group has gone straight to an unrestricted licence.
86 400, which was spun out of end-to-end payment provider Cuscal, had always said it would not obtain a restricted banking licence and instead would go straight for an unrestricted licence.
Despite not being the first neobank to be granted a full ADI it is the first to have not obtained a restricted one first with Judo, Xinja and Volt all obtaining a restricted ADI before being granted their full one.
Chief executive of 86 400 Robert Bell said for the past two years the bank had been busy building toward a smarter alternative to how Australians bank and this full licence meant that they had met the same regulatory requirements as the big four banks.
“This has been an incredibly thorough process and we’ve had every element of our business stress tested to confirm that we are as robust, secure and safe as any bricks-and-mortar bank. The only thing remaining is to bring 86 400 to market, which we’re now very close to doing,” said Robert Bell.
The licence means that the capital position of the bank is secure and the proprietary technology stack built by 86 400 is safe and secure with the appropriate risk and ethical standards embedded throughout.
The bank will initially launch with transaction and savings accounts and will be able to take unlimited customer deposits and since it has met the same regulatory requirements as the big four banks it will have the same level of protections.
The bank said it would take as little as two minutes to set up an account using Osko and from launch customers will have access to all the digital pays, like Apple and Google along with a visa debit card, ATM access and customer support.
86 400 has been built for smartphones and through the use of data and analytics customers will gain a better understanding of their spending and savings habits, enabling them to plan forward.
The bank will be live on app stores within weeks and those on its waitlist will be invited to sign up first.
Anthony Thomson, chairman of 86 400 and former founder of two UK challenger banks said that 86 400 took advantage of the amazing tech that existed and could finally offer Australians a smarter way to bank.
"Smart tech is everywhere: smartphones, smart cars and even smart homes," said Mr Thomson
"They exist to make our lives easier and more convenient. But when it comes to managing our finances, these same benefits haven’t been available to us until now. Designed for smartphones, our smart bank will help people take control of their money, offering far more than they'd expect from a bank."
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