A Neo bank is a new type of digital bank, built from scratch. Unlike traditional banks, Neo banks, like Volt Bank, have no branches or old-school, problematic IT systems. Because they are free of old-school systems and outdated thinking, they are able to move fast, be responsive and are creating a whole new way to manage money.
When you break it down, they are clever tech companies that are rethinking what it means to be a bank. And because of that, savvy people around the world are loving them.
While they’re pretty new to Australia, Neo banks have been growing a massive fan base overseas for about 5 years, and for good reasons. Apps like Monzo and Starling in the UK, and N26 in Germany are loved by people who expect good experiences from their tech, and want a genuinely helpful, better way to manage their money.
In fact, Neo banks have been among the fastest growing tech companies in the UK. It’s really not surprising if you think about it. If you offer features that actually help people via frictionless, digital experiences, you’re going to win fans.
The good news is Australia is now following-suit. About time! Neo banks like Volt Bank are gaining traction. This is all thanks to recent changes in regulations that make it easier for start-ups to become banks. The idea is to increase competition in the banking sector, which is great news for everyone (except maybe the old-fashioned banks…).
Creating a bank from scratch is a lot different to whacking a new front-end on old systems. It’s a whole new way of thinking, doing and being. Every Neo bank in the world has:
Each Neo bank has its own proposition about how they do things.
In Australia, the Government guarantees bank deposits up to the value of $250,000 for Authorised Deposit-taking Institutions (ADIs) such as Volt Bank. This means if your Neo bank is a licensed ADI, your money is guaranteed up to that amount if anything happens to the bank. It’s the exact same guarantee that traditional banks offer.