Volt urges customers to empty their deposit accounts as the neobank pioneer exits the banking sector


Volt co-founder Steve Weston. Source: supplied.

Australian neobank Volt has urged its banking customers to withdraw their funds by Tuesday next week, before the company closes its deposit-taking business and formally hands back its banking license.

In a landmark statement, Volt on Wednesday confirmed the “difficult decision” to end its deposit-taking functions and return all deposits to its customers.

Volt said “capital raising initiatives globally” have been “unsuccessful in raising sufficient additional funds to support the business.”

As a result, Volt — which secured its Authorised Deposit-Taking Institution (ADI) license in 2019 before pivoting to digital mortgage products in 2021 — plans to offload its mortgage portfolio and return customer deposits.

Volt CEO Steve Weston said the company “considered all options but ultimately, we have made this call in the best interest of our customers”.

Volt customers have been advised to transfer their holdings to another nominated bank account before Tuesday, July 5.

Customers should also stop using their Volt accounts immediately, the company says.

“You do not need to contact us to close your account,” the company said.

“Volt will close your accounts once all money has been transferred out. We will not close accounts while there are funds in your Volt account.”

The company will send customers a email detailing their final interest payouts once their accounts are closed.

Volt has adequate liquidity to return deposits and “pursue a realisation of the value of our remaining assets”, the company added.

It also reassured customers that deposits under $250,000 are protected under the Australian Government Financial Claims Scheme.

The Australian Prudential Regulation Authority, which oversees Australian ADIs, says it will “closely monitor the process to ensure funds are returned to Volt depositors in an orderly and timely manner”.

The decision comes three and a half years after Volt secured its full ADI license, becoming Australia’s first neobank to do so.

Volt, along with competitors Xinja, 86 400, and Judo, served as Australia’s first real salvo of neobanks hoping to challenge the incumbent players.

But the sector has suffered in recent years. Xinja pulled the plug in late 2020 and handed its ADI license back to APRA in early 2021 after a highly-publicised $433 million investment deal failed to eventuate.

86 400 itself was acquired by NAB early last year in a $220 million deal, ending its neobank ‘challenger’ status.

Judo Bank, which focuses on the SME sector, successfully listed on the ASX in November 2021.


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