(9 May 2018 – Australia) Volt Bank has been given Australia’s first new restricted banking licence as part of a government initiative to boost competition in banking.
The restricted licence allows start-up banks to operate under restricted conditions for a temporary period of time, before going through the tougher process of getting a full banking licence.
The plan to allow ‘restricted’ banking licences is similar to the model in the UK, where a series of digital “neo banks” have sprung up to challenge the established giants of the industry.
Volt bank will be digital only and is hoping to capitalise on the heightened mistrust around the big banks in the market brought about from the royal commission.
“Clearly trust [in the banks] is under enormous pressure and even if the trust isn’t broken it’s hanging by a thread,” said Volt co-founder Steve Weston. “But people are not willing to switch unless they believe the alternative is better for them and is easier to do… we need to be fundamentally different and better.”