The neobank first launched in May 2017 and was granted a restricted ADI from the prudential regulator in December 2018.
The 100 per cent digital bank already has products in the market including a prepaid card and app with bank accounts launching from today.
Chief executive and founder Eric Wilson said the mobile-designed bank was here to shake up the old-style banking sector.
“It’s enormously exciting that Australians have a new, independent bank. It’s time Australia’s very old banking model was disrupted,” said Mr Wilson.
Mr Wilson said that the granting of the licence meant that Xinja was the first independent Australian neobank to get a licence and launch an account.
“We are the first independent entrant to the retail market since mid 80s so no one knows what demand there is for this but we think we will be successful, there’s an appetite for it,” he told Investor Daily.
It is not of course the first neobank to be granted an ADI by APRA with Volt being the first by being granted a licence back in January, but as yet has no products in the market.
Fellow neobank 86 400 was also granted a full ADI a couple of months ago, with the bank choosing not to go down the route of a RADI, instead going straight for a full licence.
“Congratulations to the team at Xinja on securing their licence. We’re big believers that more choice is good news for Australians and the banking sector as a whole,” said 86 400’s CEO Robert Bell.
86 400, like Xinja, also did a soft launch of its products by allowing early birds who had signed up access, but they have just launched both a transaction and savings account to the general public.
“Thousands are already using 86 400’s full transaction and saving accounts, having signed up to our early-access waitlist. We finished inviting waitlist customers last week and will be launching nationwide imminently, meaning anyone in Australia can sign up and experience our smarter approach to banking, in as little as 120 seconds,” said Mr Bell.
Mr Wilson said that the bank would be rolling out its accounts to the public but the first to gain access would be the existing prepaid card customers and anyone that had already signed up to join the waitlist.
“We are starting on our waitlist that we have built, we’ve had some very patient customers and we are starting there and will be accelerating that over time.
“We will be working towards enabling people to sign up instantly but as a new bank we need to take it nice and slow and control the numbers that come in quite carefully,” said Mr Wilson.
The transaction accounts launched today are accessed via the app and come with a Xinja Debit Mastercard and the neobank will soon launch “Stash” which is its savings account.
“We have to make sure we master each product as we go along and the bank account is probably the most complex of all of them, so we’re launching that one first. We will incorporate more features into that like a savings account, and then we will speed up a little bit. So an overdraft beginning of next year, personal lending in the first quarter and then mortgages end of that quarter into second quarter,” said Mr Wilson.
Mr Wilson said it had plans to add lending products in the first quarter of 2020 as well as other “unbank” surprises.
“Xinja is a bank built for purpose and for profit but we are for purpose which means we have to do things like tracking if our users are better off since joining us and how fast we can get them out of debt. We need to not tell people how good we are, we need to be doing it and doing it over and over again,” he said.
CEO of neobank Douugh Andy Taylor congratulated Xinja and said that the more new entrants to the market the better.
“The first wave of new banking entrants offers Australian consumers more choice but isn’t solving financial wellness issues,” he said.
Mr Taylor said that Xinja was in a position to education the market on what financial products are available, but he worried that none of the new banks were disrupting the underlying issues.
“We need to change the business model and build technology that changes consumer behaviour, creating better financial habits. It can’t just be more of the same price improvement on traditional banking products, as that does not build better engagement or improve overall financial wellness,” he said.
