‘We’re tech companies’: The neobanks’ advantage

A big advantage that “neobanks” have over the big four is that they are nimble and highly scalable technology companies focused on customer experience, according to the co-founder of Up.

After hearing Stephen King from the Productivity Commission (PC) claim that challenger lenders do not have a realistic chance at competing with the major banks and will ultimately be “gobbled up” by them, Dominic Pym said the advantage that challengers such as his company Up, along with the likes of Volt and Xinja, have is that they are technology companies with a focus on improving customer experience and the ability to move and adapt fast.

Speaking on a panel at the Australian Payment Summit in Sydney on Tuesday (27 November), Mr Pym said: “We spin up our entire banking platform in 45 seconds… and we do that thousands of times so that we can create mass parallelisation to do testing. We do automated testing using technology, which would normally take a bank weeks or even months to do… We test thousands of devices, hundreds of operating systems, every single possible use case scenario and do all of that in 26 minutes.

“We do [that] twice an hour, so about 50 times a day, so that we can deploy these product innovations to our customers. This month (November), we’ve averaged 10 deployments to customers a day. So, if you want to know how we differentiate from the big banks, they can’t do that.

“We don’t have to wait six months and have an external firm come in and do an external audit. We actually do it all in real time. That’s going to take years for the big banks to catch up.”

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Source: ‘We’re tech companies’: The neobanks’ advantage – Mortgage Business