'Grown ups': Neobanking sector chases customer sign ups

Australia’s digital banking sector promises the sector is no longer in its infancy and this year the chase for customers is on.

“I’m guessing that you’ll see four to five new neobanks start up over the next 24 months,” chief executive of Xinja, Eric Wilson, says.

The banking startup kicked off 2019 by launching a new equity crowdfunding campaign, raising $500,000 in its first nine hours to build on its previous $2.7 million raise in January 2019.

Revenues are currently in the tens of thousands, but the business is pitching long-term growth once its products are formally launched.

The business has a restricted banking licence from the Australian Prudential Regulatory Authority and is anticipating a full licence this year.

Wilson says this year marks Xinja as “a grown-up bank” and once APRA removes the startup’s P Plates, it will be ready to get its bank accounts and mortgage options up and running.

Xinja isn’t the only digital banking-focused startup that sees this year as a turning point for these types of companies in Australia.

Many Australian fintechs working in this space are still fundraising or pre-launch, but those that have started accepting customers say it’s clear more customers will want to dip a toe in the water this year.

“The honest truth is that I don’t think people are going to switch immediately,” chief executive of digital banking app Up, Dominic Pym, says.

Up launched to customers in October 2018 and the company says that it has hit the 20,000 user mark.

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Source: ‘Grown ups’: Neobanking sector chases customer sign ups