Two neobanks are about to face their first Australian parliamentary hearings
Link copied to
Tomorrow, Australian parliament will hear from neobanks Volt and Judo Bank for the first time ever.
The pair will appear before the House Economics Committee tomorrow as part of a broader hearing which will also see a number of “smaller banks” (outside the big four) participate.
These include Bank of Queensland, Beyond Bank, HSBC, ING, Teachers Mutual Bank, Unity Bank as well as the Australian Banking Association.
While most of these names – except the neobanks – have appeared before Australian parliament before, they haven’t done so since November 2019, before the COVID-19 pandemic began.
Committee chair Tim Wilson said it will seek updates on the banks’ progress in implementing the recommendations of the Hayne Royal Commission, as well as their approach to COVID-19.
“Customer-owned and foreign banks operating in Australia are not exempt from scrutiny and should be held to account in the same way that the Four Major Banks are,” he said.
“Smaller banks play an important role in Australia’s financial ecosystem, and they also have responsibilities to their customers to uphold”.
But arguably Judo Bank and Volt will the most interesting having never appeared before.
In the past year however Xinja went out of business and while 86400 has been bought by NAB it is being folded into NAB’s existing digital offering, UBank.
Volt and Judo Bank however have survived.
Judo, which specialises in business lending, raised $175 million earlier in June on a valuation of $1.9 billion, and claims that May saw its loan book hit $3.3 billion.
Volt meanwhile has been aspiring to enter mortgage lending and it has partnered with broker aggregator AFG (ASX:AFG). It has also raised $85 million, of which $15 million was chipped in by AFG.
Volt and Judo Bank were singled out by Tim Wilson as neobanks the Australian parliament’s committee was looking forward to hearing from.
He noted the difficulties facing the sector, and hinted the hearing might give an indication as to where the companies and the sector may go to from here.
“Neobanks have the potential to bring competition to the banking sector, however they have a long way to go and face many challenges, as we have seen with the acquisition of 86400 and the closure of Xinja,” Wilson said.
“We are looking forward to hearing from Volt and Judo Bank on their experience and role in the future of Australia’s banking sector.”