Yahoo Finance ‘We don’t screw people over’: New bank Xinja wants to take on the Big Four
Xinja chairwoman Lindley Edwards will be speaking about economic headwinds at Yahoo Finance's All Markets Summit on the 26th of September. Join us for this groundbreaking event and buy tickets here.
A new bank has officially burst onto the Australian market – and it’s got high ambitions.
Neobank Xinja has received the go-ahead from prudential regulator APRA to operate as an authorised deposit-taking institution (ADI), or a bank for short, and it has plans to take on the Big Four.
"It’s time Australia's very old banking model was disrupted,” said Xinja CEO and founder Eric Wilson.
“We are 100 per cent digital, and we want people to have a real alternative to the incumbent banks. We want to give customers a real choice to be able to be with a bank that looks after them,” he added.
“From today, we’re rolling out bank accounts to customers.”
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Xinja today launched transaction accounts, which are accessible via the Xinja app, and comes with a Xinja debit Mastercard.
The digital bank plans to launch ‘Stash’, its savings account, and also has lending products in the pipeline set to be released in the first quarter of 2020 among other “unbanky” releases yet to be announced.
Xinja has had customers and products in the market since 2018. Until now, Xinja has been operating on a restricted ADI license, granted by APRA in December 2018, which allows fledgling institutions the room to conduct business activities in a limited capacity for two years while they build their capabilities and resources.
Xinja has distributed more than 12,00 prepaid cards which are in use in 17 countries every day, with more than 28,000 people already having signed up to Xinja.
It’s not the first neobank on the market, however: Volt was first to be granted an ADI license in January this year, followed by 86 400.
Wilson said that Xinja’s advantage was its technology, which has been designed for flexibility and to give customers “hyper-personalised services”.
“We don’t have bricks and mortar branches or old technology that we are constantly patching to meet the needs of customers,” Wilson said. “Our costs will be significantly lower than traditional banks.
“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,” he added.
“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 behaviour that can improve their finances.”
Wilson said he is relying on Xinja’s ethos of doing the right thing by our customers to keep customers and to be recommended to friends.
“I know we will make less money from our customers than traditional banks,” he said. “We are fine with that,” he said.
“Our key performance indicators at Xinja Bank include ensuring our customers do better. And that’s an important difference between us and our competitors.”
Xinja has a list of 10 Golden Rules on their website, one of which reads: “We are here to make money, that’s why we exist, and we don’t screw people over to do it.
“We don’t lie to our clients in person or in marketing. We don’t engage in immoral lending; if our grandmother would think it was wrong, then it is. We aim to make lots of money ethically and we are proud of it.”
Sitting on Xinja’s board are industry heavyweights such as UK neobank co-founder Jason Bates, former Tesla engineering leader Thomas Vikstrom, former Obama advisor on the future of banking Brett King, and board chair and AFG Venture Group Lindley Edwards.
Yahoo Finance’s All Markets Summit is on the 26th of September 2019 at the Shangri-La, Sydney. Check out the full line-up of speakers and agenda for this groundbreaking event here and get tickets here.
