Aussie challenger bank 86 400 has become the latest to be granted its full authorised deposit-taking institution (ADI) licence by the Australian Prudential Regulation Authority, proving itself as a contender in Australia’s neobank race.
Fully backed by payments provider Cuscal, 86 400 is headed up by former ANZ executive Robert Bell, and calls itself Australia’s ‘first smartbank’.
The licence application was an “incredibly thorough process”, Bell said in a statement.
“We’ve had every element of our business stress-tested to confirm that we are as robust, secure and safe as any bricks-and-mortar bank.”
The 86 400 app is expected to launch in the App Store and on Google Play within a matter of weeks, and will first be made available to people on the waiting list.
This licence approval marks the startup as a frontrunner in the Aussie neobank race.
Up was the first to come to market in October last year, with its partnership with Bendigo Bank allowing it to bypass the lengthy regulatory requirements its competitors have faced.
In January this year, Volt became the first independent neobank to secure its full ADI licence, although it is yet to release a product.
Small business lender Judo Capital was hot on Volt’s heels, securing its ADI licence and re-branding as Judo Bank in April.
Xinja, meanwhile, is still waiting for its own ADI licence. Speaking to StartupSmart last month, founder Eric Wilson said he’s “absolutely hopeful” the approval will come through by the end of the year.
Over the past 12 months, the neobank space in Australia has been slowly heating up, with the challengers each reaching milestones and getting closer to providing an alternative to traditional banking.
However, the leaders in the industry are none too worried about competition — at least, not from each other.
Speaking to StartupSmart in February, Bell said 86 400 has its sights set firmly on the big four banks.
“We view the four large major banks in Australia as our main competition, as they have 85% of the market share,” he said.
“To the extent there are two or three neobanks in the marketplace, that competition will be helpful, and it will drive awareness of digital banks as alternatives.”
Bell also has the added bonus of Anthony Thomson, co-founder of UK challenger Atom Bank, sitting as chair of the 86 400 board.
Thomson said he is “incredibly confident” 86 400 will provide “a smarter alternative to the big four banks”, he said in a statement.
“Smart tech is everywhere: smartphones, smart cars and even smart homes. They exist to make our lives easier and more convenient. But when it comes to managing our finances, these same benefits haven’t been available to us until now.”