Seconds-rate neobank dampens debut

Ian Rogers Authorised deposit-taking institutions

A soft launch over the last couple of days sees 86 400 offering services five weeks after the Cuscal-backed neobank secured a full banking authority.

This makes 86 400’s time to market brief in comparison with the likes of Xinja Bank (which needed around six months after being licenced to be up and running), and volt bank which is rumoured to be aiming to enter the market next month, eight months after earning a full banking licence.

There is a competitive, but not market leading, interest rate on 86 400’s Your Save account. This pays a base rate of 0.4 per cent (subject to a monthly deposit minimum of A$1,000) paid on balances up to $100,000, a savings product that for now “includes a bonus rate of 2.1 per cent”.

Comparison website MoZo lists AMP Bank and Rabobank as price leaders in the bonus saver category, at 2.75 per cent, though the 86 400 rate is miles ahead of anything from any major banks' main brand.

The Pay account pays zero interest and, like the Your Save account, incurs zero fees.

One curio in the 86 400 terms is that “there’s a maximum balance of $5 million across your Pay and Save accounts”.

The bank’s pillar 3 disclosure shows it had $55 million in capital at the time it was licenced by APRA last month, though its management and board are on the hunt for at least $100 million in new funding, with Morgan Stanley as adviser.

The 86 400 app is encouraging users to “connect bank accounts, credit cards, home loans and more”.

While account aggregation is not all that novel in Australia, it’s also never been successful and for now 86 400 are aiming high, though volt bank are believed to consider this feature a point of difference when they finally reach the market in a few weeks’ time.

Named for the 86,400 seconds in a day, the entry of this industry tyro provides an alternative storyline to the endless, breathless media promotion of Bendigo’s Up digital banking brand.

Up Bank more or less swept every award that it could possibly be associated with at the 2019 Finder Awards late last week.

Tens of millions of seconds ahead of this week’s neobank arrival, Up is for now the fintech brand to beat.

As Bendigo’s managing director Marnie Baker told a results briefing last week, Up was chiefly responsible for the number of “new customers [rising] by almost two-thirds for the full year, and …. net new customers rising four-fold compared to last year; with equivalent growth half-on-half at 239 percent”.

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  • Jason from InfoChoice

    RAMS 2.55% and MyState 2.50% are market leaders in ongoing bonus rates

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