Best digital banks in Australia

This website has spoken about some of the best digital banks around the world.

This has included my review of the best digital banks in the UK. How about in Australia? That will the topic of this article.

If you want me to answer any questions on Quora or YouTube, or you are looking to invest, don’t hesitate to contact me or use the WhatsApp function below.

Introduction

The move from traditional banking in brick-and-mortar buildings to digital banking on the Internet has forever changed the banking industry and the way money is managed and moved between individuals, merchants, and financial institutions.

Financial institutions that do not have a digital presence to provide digital banking to customers will not be able to provide the level of service that most customers expect from banks and all financial institutions.

Corporate and retail banking customers are looking for the best-personalized digital banking experience that they can access anytime, anywhere. Individuals are looking for the same thing so they can manage their finances on the go without having to visit their physical bank branch.

Digital banking has allowed banks to serve more customers than ever before through as many different online channels as possible, while providing more and more banking services in real time and on the same day.

So what is digital banking? Digital banking involves using traditional banking services that were previously only available with conventional banks, such as cash deposits, withdrawals, transfers or account management, and digitizing them so that they can be done electronically through online channels.

Banks and credit unions have gradually adapted to their banking services and have refined their digital technologies over the years as digital banking has become the norm in the banking industry.

Digital banking services such as payment instruments have become available via mobile devices over the past decade, driving the digitalization of banking services and creating the concept of mobile banking that has become vital to the industry.

But what is the main difference between a digital bank and an online bank?

Digital banking and online banking are essentially the same thing, but there is one key difference between them.

Digital banking aims to digitize all the services that a financial institution has traditionally provided in physical branches to provide customers with a more convenient service than ever.

Online banking aims to digitize the same services, but is limited in the types of services that can be provided to customers. Physical banks now generally offer online banking services that eliminate the need for customers to visit actual branches, but some basic banking services, such as opening an account or obtaining a loan, must be done in person. Digital banking allows you to perform all banking services remotely and electronically.

Is digital banking safe?

It is surprising people even ask this question in 2020. Digital banking has its own unique risks, but it is just as, if not more, secure than traditional banks. Digital banks must comply with the same federal regulations and requirements as traditional banks.

Digital banks also leverage data through an open banking financial data network, which allows money to move safely and securely between financial institutions. Using artificial intelligence and machine learning algorithms, digital banking platforms almost instantly check transactions for fraud. 

The level of risk reduction associated with digital banking empowers customers to worry about privacy, which gives them more confidence in the security of their finances.

Australians using neobanks: statistics 

Digitalization is a phenomenon that permeates much of modern life, including everything from the move from video rental to streaming services to the move from paper tickets to virtual transit cards. 

While not new, the same has happened in banking with the digitization of processes and platforms such as online banking and app-based banking for Australian consumers.

What’s new and evident in Australia in the past few years is the emergence of digital banks, also known as neobanks. Designed exclusively for smartphone apps, Australia’s neobanks are betting (literally) on a continual shift towards banking that is not only online but purely app-based.

One of the surveys of 1,035 Australians, conducted in October 2019, found that one in four bank customers have either switched or are seriously considering switching to neobank, and it looks like they could benefit.

So as we can see, Australians really like using neobanks and with the time the number of users will increase. But what banks are the best in Australia-residents? We have done researches and here what we have found:

• Revolut
• Volt Bank
• Xinja
• 86400

These are the best digital banks in Australia that are the most loved and the most convenient in many ways, which we will talk in this article.

Now let’s start discussing each of these neobanks, try to figure out their features, how they work, the significant pros and cons and much more. 

Revolut

Revolut is a digital bank. It started in 2015 as a low exchange rate travel card, and is now gradually becoming a bank.

It is the fastest growing digital bank with the widest range of features and probably the best choice for those who travel frequently.

Revolut has over 8 million customers, of which Revolut has reported over 350 million transactions totaling over £ 40 billion.

Opening a standard free account with Revolut will provide you with a checking account, a Euro IBAN account and a blue pink bank card.

In addition to all the usual activities you can do with a checking account, such as sending money to friends and withdrawing money from an ATM, you can use an impressive array of other features, including free international money transfers, free global spending, etc.

Revolut has three tiers: Standard, Premium and Metal. Premium (which costs £6.99 a month) and Metal (£12.99 a month) – they both essentially offer more features and benefits.

It is very easy to register in Revolut, all you have to do is just to download the app and register – you don’t need proof of address and credit check, which speeds up the process.

However, you will need to verify your identity by taking a photo of yourself and a valid ID. After registration, you can request a Revolut contactless card.

The app is simple, easy to navigate and streamlined. What you can do with Revolut? Here you can find some of the opportunities that the bank offers:

• Use it as a checking account – You receive an account number and sorting code. You can set up recurring payments, withdraw cash from ATMs, make contactless payments, and use Apple Pay and Google Pay.
• Make international payments – The application allows you to transfer money in 30 currencies without commission at the interbank exchange rate (at the same rates that banks assign to each other).
• Spend all over the world for free – all expenses abroad are paid at the interbank rate, which is the best option for consumers.
• Pay your friends – Easily pay other people or use the split bills feature to split group expenses (more on “Group bills” below).
• Freeze your card and set a spending limit – Freeze your card if you lose it, unfreeze it if you find it, set monthly spending limits, and enable additional security.
• Save some money – Save money through recurring payments or collect extra trivia in Revolut’s Vaults. It does not generate interest, but it can be useful for short-term savings. You can also create a group vault with friends and family and set aside money for a common goal like a holiday.

Revolut pros:

• Can top-up in and hold several currencies
• An array of expanding extra features (e.g. cryptotrading, disposable virtual cards)
• Premium subscription options with handy perks (e.g. travel insurance)
• Quick to apply for and set up, no credit checks
• Use the card abroad with no fees
• User-friendly app with control over accounts and cards, spending control visualisation and a lot of great features

Revolut cons:

• Has a banking license, but no current accounts yet (no deposit guarantee or standing orders, direct debits only in EUR)
• At weekends, when the markets are closed, Revolut applies a mark up of 0.5% on major currencies and 1% on other currencies on its rates
• No other banking products available, such as overdrafts, credit cards or interest-paying savings accounts

Volt Bank

Volt Bank is one of the pioneers in the world of Australian neobanks. It is part of the technological banking revolution that offers Australian customers deeper insights, more customization and the latest payment innovations – all in one smartphone app.

Founded in October 2017 and based in Sydney, Volt Bank has grown rapidly despite its short existence. In May 2018, it became the first Australian neobank to receive a Restricted Depository Authorized Institution (RADI) license from APRA (Australian Prudential Regulatory Authority). More recently (in January 2019) it became the first neobank to receive a full license to operate as an ADI.

This means that when it comes to regulation and products, Volt Bank is no different from any other Australian bank. It can accept deposits from clients through bank accounts and savings accounts, and even provide borrowing options such as personal loans and home loans in the future.

After publishing the first details of its savings account in December 2019, Volt appears to have joined the top 40,000 users on its waiting list and many more. This is the first product to be released by Neobank, but don’t be surprised if a Volt Bank transaction account appears in the Volt app soon along with a Volt debit card.

With a constant interest rate of 1.00% and zero monthly fees, the Volt savings account is likely to attract the attention of depositors looking for a profitable and worry-free option to keep their money.

It’s also worth noting that since Volt Bank has its own ADI, a savings account and any deposit accounts it opens in the future (such as a transaction account or even a mortgage credit account) will be regulated just like any other Australian bank. 

This means that Australians considering using Volt Bank to store their money will be safe in the knowledge that deposits (up to $ 250,000 per person) are protected by the Government Financial Claims Program (FCS).

Here are some of the features that the application offers:

Saving challenge

One of the first features that Volt Bank introduced in its app is the Volt Savings Challenge feature. Aiming at helping users create an ongoing saving habit, users can set a savings goal (like $ 100 per week) in the app and then receive regular push notifications from Volt to remind them to add money to their account. The task is visually represented in the application in the form of six “circles of savings” – one for each week, two weeks or month of the task – which are filled in whole or in part, depending on whether they are completed or not. 

New payment options

One of the topics Volt asked its users about on the Volt Labs app was payments: a) how they would pay for things now and b) how they would like to pay in the future. Additionally, the focus has been on whether users like to pay with cash or digital, including whether they use virtual payment methods or digital wallets like Apple Pay and Google Pay.

While that doesn’t necessarily mean Volt Bank will include mobile payment options like Apple, Google and Samsung Pay, when it does launch a bank account or a transaction account, we’d be surprised if they didn’t. After all, Volt Bank makes sense to offer its users the ability to make OTC payments from their smartphones as they only work with apps! In addition, many other neobanks in Australia, including 86,400, Up and Xinja, have digital wallet options.

Money management and categorization

Another important deployment in the Volt app when spending becomes possible is more comprehensive money management and categorization features than traditional banks typically offer. This because the Volt Labs app asked users specific questions about how they classify their money and whether they use software (other than the regular banking app) to analyze and manage their spending.

Volt pros:

• Market-leading savings rate
• No conditions to earn interest
• In-app tools and games to help you develop a good saving habit
• Quick and easy sign up process

Volt cons:

• No debit card access to the account yet
• Low customer service

Xinja Bank

As part of a new wave of digital banking that is capturing the attention of Australians across the country, Xinja Bank is one of the newest independent neobanks changing the way money is managed and day-to-day banking.

Founded in 2017 and headquartered in Sydney, Xinja Bank is 100% app-based and offers the latest features and benefits to meet the banking needs of young and tech-savvy Australians. These include new and secure payment options for receiving and transferring money, as well as a simple, interactive app design that makes it easy to use mobile banking.

Apart from the high level of security of Xinja in their application, they are also licensed by an Authorized Depository Institution (ADI), which means that they are subject to exactly the same rules as other Australian banks when it comes to your money, including a deposit guarantee scheme, which guarantees funds up to $ 250,000 per person.

Xinja has already launched a transaction and savings account and they also have grand ambitions for the future, including offering products such as home loans, personal loans and time deposits, a stock trading platform called Dabble, and a whole host of new and exciting app features. 

Xinja Saving Account

There are no conditions attached to the Xinja “Stash” Savings Account, which means that you do not need to fulfill any requirements in order to be rewarded at the maximum rate. You can earn up to 1.50% interest on balances up to $ 50K. Instant account creation is done through the Xinja app and the account must be linked to a Xinja bank account.

Xinja Housing and Personal Loans

Xinja Bank has no plans to pause and reflect now that their transaction and savings accounts are open. On the contrary, they are already planning to launch loan products such as Xinja Home Loans and Xinja Personal Loans sometime in 2020. 

In fact, Xinja’s home loans and personal loans are already being tested internally and like their savings accounts, they promise simplicity, great prices and some innovative features when they become available.

Dabble – Xinja stock trading platform

In July 2020, Xinja announced its intention to launch its own trading exchange platform called Dabble. Dabble is slated to provide Xinja users with direct access to US stocks and ETFs in the near future for a monthly subscription fee of $ 8 plus 1% currency exchange fees.

Xinja pros:

• Create an account in minutes with no paperwork
• Spending analysis and categorisation tools in the Xinja app
• Low-fee travel money solution
• Linked Xinja savings account offers a high variable interest rate

Xinja cons:

• No bank branches
• No web-based Internet banking (it’s 100% run through the app)

86400 

86,400 definitely sound strange, especially for a bank, but it’s actually based on the number of seconds in a day. But what does banking have to do with it? 

Launched in September 2019, 86,400 is one of Australia’s pioneering neobanks that aims to provide Australian clients with easy access to their money and real-time information about their finances – every second of the day.

This is why digital bank has developed a completely new mobile platform that uses technologies to get more accurate information about money, more personalized savings tools, minimal fees and products with some very attractive features.

And they have put together a stellar team to deliver on that promise. This was announced publicly in June 2018. Sydney Neobank is headed by CEO Robert Bell, and Anthony Thomson (founder and chairman of British neobanks Atom Bank and Metro Bank) is on the board of directors. 86,400 is also supported by Cuscal, one of the largest payment solution providers in Australia.

Best of all, 86,400 is a Fully Authorized Authorized Depository Institution (ADI), approved by the financial regulator APRA back in July 2019. This means that 86,400 can offer their own home loans, transaction accounts and savings accounts – all accessible through the 86,400 mobile app.

As with their banking products, the 86 400 mobile app, which includes several of the new and innovative features you’d expect from a digital bank, gives cause for joy. Here are some that we think stand out at the moment, but according to 86400 there are others in development:

Instant transfers

86,400 reported that its Core Banking Platform was configured to provide real-time payments. This means (almost) instant transfers between 86,400 users and other eligible Australian bank accounts via NPP (New Payment Platform) using Osko money transfer service!

Smart alerts

A 86 400 app can study your transaction history and automatically predict when recurring payments are due (from over 200 companies). And 86,400 will even nudge you if you haven’t met your monthly savings requirements so you don’t miss out on your interest – which most banks don’t.

Integration of external data

Forget about simple smart banking from day one. 86 400 are determined to turn back time and provide customers with information based on their old transaction history! To do this, users will be able to connect to their accounts from over 150 Australian financial institutions, and this data will be synced across the 86 400 app.

Latest mobile payment options

The 86,400 would not have become a digital bank if they hadn’t provided the latest mobile payment options and digital wallets, and in this regard, they haven’t let the mobile hobbyists down. Depending on your smartphone, you’ll be able to set up your 86 400 debit card with Apple Pay, Google Pay, Samsung Pay, Fitbit Pay, or Garmin Pay so you can pay for your purchases without using plastic.

Here is all we have prepared for you. This is a digital century and with the time we all have to switch to digital banks. So if you live and work in Australia you can use one of the mentioned neobanks and start your digital experience. 

Further Reading

In the answers below I focused on:

1. What are the main reasons millionaires go bankrupt? Are all of these reasons obvious? 

2. Is the average person in Dubai rich, high-income and/or wealthy? This answer might surprise many of you. 

3. What steps can people take in their early 20s to ensure a comfortable retirement later on, apart from the obvious things like investing at a young enough age to take advantage of compounding?

4. Is it true that we can “think ourselves rich” as a famous book once said?. Or is mindset only one component of future results?

Click to read more.

What are the main reasons millionaires go bankrupt