(Australian Associated Press)
A new, online-focused bank is coming to Australia in the hope it can lure customers from the big four banking giants.
The bank- which will be called 86 400 after the number of seconds in a day – will start offering transaction and savings accounts from early next year followed by home loans by June.
UK banking veteran Anthony Thomson, who will chair the new company, says Australia has the most profitable banking market in the world because of its high fees and charges.
Australia’s top four banks – Commonwealth Bank, ANZ, National Australia Bank and Westpac – posted a combined $31.5 billion in cash earnings in 2017, up 6.3 per cent from a year earlier.
“Banks in general, Australian banks or UK banks, have lost sight of the customer, they just think they exist to make money, and I believe passionately that profit is a by-product of giving the customer better products, a better service or better experience,” Mr Thomson said.
86 400 will be only an online bank, with customers to do all their banking via a phone app.
The bank is for cashless transactions, offering customers the ability to use digital services such as Apple Pay, Samsung Pay and Google Pay, but does provide an option for ATM cash withdrawals via Visa debit cards – made easier by the big four banks recent decision to scrap foreign ATM fees.
The bank currently consists of 60 people but will have a customer service team based in Sydney to answer calls and chat messages.
A former head of ANZ Bank’s Japan operation, Robert Bell, is CEO of the bank.
Its executive team also includes a former Westpac general manager of digital and a former CBA international chief risk officer.
The bank is working with APRA to obtain a full banking licence ahead of a soft launch towards the end of the year and entry into the public market in the first quarter of 2019.
Mr Thomson said the bank will have a lower cost base than traditional banks because it doesn’t have legacy technology and physical branches.
Mobile banking is rising in popularity in Australia: research from Roy Morgan shows around 8.3 million people used mobile banking in an average four-week period in the six months to June, 2017, up 72 per cent from 4.8 million users for the same time period in 2013.
Mobile banking was used by 41.5 per cent of banking customers, compared to the 26.5 per cent using branches, the 2017 Roy Morgan survey found.
Mr Thomson is hoping to replicate his success with UK online banks Atom Bank and Metro Bank, in Australia.
Metro Bank was launched in 2010 and after six years had one million customers and a market capitalisation of $5 billion, Mr Thomson said.
Payment processor Cuscal is backing 86 400, with additional shareholders expected to come on board.