Amidst the ongoing controversy arising from the Royal Commission into the financial services industry, and decreased public approval of Australia's major banks, a new online-only bank has thrown its hat into the ring to provide something different.
Called 86 400, named after the number of seconds in a day, the bank is looking to lure customers from the big four banks, promising a better and cheaper service.
86 400's team is helmed by former ANZ Japan CEO Robert Bell as the new CEO of 86 400 and UK banking pioneer Anthony Thomson as incoming chairman. Thomson is the former chairman of Metro Bank (the first new bank in the UK in 150 years) and Atom Bank (the UK's first digital bank).
The online-only bank will launch in beta towards the end of 2018 and intends to launch to the public in the first quarter of 2019, complete with a transaction and savings account from day one.
Thomson says 86 400 hopes to solve many of the problems Australians have with banks currently: expensive fees, complicated and faulty online systems, and banks working to make profit rather than serve the customer.
"Banks in general 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," says Thomson.
Customers will do all their banking via a phone app, and is mostly geared towards cashless transactions, offering customers the ability to use digital services like Apple Pay.
The company is fully funded and backed by Cuscal, Australia's largest independent provider of end-to-end payment solutions. The 60-person team anticipates requiring in excess of $250 million of capital over the first three years of operation.
Business News Australia spoke with CEO Robert Bell about why 86 400 is offering a real alternative and the future of the new bank.
Why is now the perfect time for 86 400 to launch?
Australians deserve a better banking experience, and a genuine alternative to the Big Four banks. You only need to look at what's going on in the Royal Commission to see that. The big banks have become too focused on profits, rather than providing great service for their customers. We strongly believe that profit should be a by-product of doing something great for your customer.
How receptive are you anticipating Australians will be to your offering?
Let's face facts. Australians have been treated poorly by the big banks for too long. But until now there's been nowhere for them to turn. Bank 'A' is the same as bank 'B'. Technology is going to change that, and in fact is already doing so in other parts of the world, where some new banks have experienced tremendous growth and delivered levels of customer satisfaction the big banks could only dream of. We expect Australia to be no different, and that's why we're building 86 400.
Being totally online is interesting how are you going to manage that from a customer service perspective?
We're building an entire bank in a mobile phone, meaning people can bank from the comfort of their homes, offices, or on the move - without having to visit a branch. However we also understand that at certain times, our customers will value speaking with a real person and will be growing a customer service team to meet that demand.
Apart from transaction and savings accounts, what other services will 86 400 offer?
We will be launching in Q1 2019 with transaction and savings accounts, and will be ready for Open Banking from day one. Over time, we will offer Australians a full range of banking services, including home loans.
Will this service be cheaper than traditional bank offerings on the market at the moment?
We're building a more efficient model of bank, so we won't be hamstrung by expensive, cumbersome legacy technology or branch networks. As a starting point, this will mean we can be extremely competitive on price, but it's actually much more than that. We're completely redesigning the banking experience for Australians, and will be looking to add value wherever we possibly can. As our name suggests, every second, of every minute, of every day.
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