Watch out big four, there’s a new bank in town: Xinja!
Don’t let the odd name fool you, this ‘neobank’ is ready and raring to shake up banking in Australia in a big way.
And with the greenlight from the Australian Prudential Regulation Authority (APRA), their time has come. They’ve got a license to…disrupt.
The breaking news for Xinja is that their banking license is now unrestricted. That means APRA has given them their blessing to bank however they please.
Xinja hasn’t wasted any time in making their intentions clear either. They’ve already launched new transaction accounts for customers. A product that is designed and marketed towards the elusive millennial demographic.
Powered by German software giant SAP, Xinja’s digital-only accounts are set to be a breath of fresh air for banking apps. They aim to leverage data to provide customers with a product that works best for them.
It doesn’t end there either. Xinja is also planning to unveil a savings account product in the near future too. As well as lending services early next year.
Everything will be built out from their digital infrastructure. A backbone that keeps costs low and boasts no, or minimal fees, for customers.
The big, ailing banks simply can’t compete with this. Their legacy systems are far too embedded to let them pivot. A fate that is going to keep dragging on their bottom line, and their dividends.
But, that doesn’t mean Xinja are made just yet. They’ve still got to prove that unconventional methods can win over conventional people.
Unconventional is in fact probably the best word to describe Xinja. Almost everything they’ve done to date has been at odds with traditional banking.
For instance, one fascinating detail is that despite being a public company, you won’t find Xinja on the ASX. They were one of the first companies to successfully raise capital through equity crowdfunding.
Xinja has consistently pushed the envelope in what it means to be a modern bank. And they’re looking to bring this same out of the box thinking to their products, as they note:
‘But it’s not just about technology: our purpose is to help people make more out of their money and get out of debt faster. And if we stick to that, we will succeed. We’ll use technology and data to prompt money mindfulness; nudging people toward better every day behavior that can improve their finances.’
It’s a bold claim, but a worthy pursuit. If they can genuinely deliver it, they will revolutionise the very idea of banking.
The challenge now is to overcome that first major hurdle: acquiring customers. All the grand ideas and plans in the world are worthless if no one else buys into it.
Scale is what Xinja needs, and with this new license they are one step closer to making it happen. Keep an eye on this neobank, it is a company worth following.
But, if you’re looking for other, investable pursuits, then we’ve also got you covered. Check out our report on three fintech stocks you should own today. You can find it, for free, right here.
For Money Morning