Digital banks news – January 2020

digital banks news january 2020

Hello, and welcome to the newsletter for January. We are committed to keeping you up to date with all the latest developments in the digital banking world. We’ll bring you news on the ‘movers and shakers’ in this fast-paced sector throughout the year.

This month, we lift the lid on the airline ready to take on digital banking, look at milestone developments in emerging territories, detail some fascinating research in Australia, and applaud a genuinely remarkable achievement in our sector. Read on!

Digital banks. Ready for take-off?

Malaysia is in the process of finalizing its licensing framework for the launch of digital banks. Now there are reports that AirAsia is among the organizations preparing to apply for a digital bank license in one of South East Asia’s economic powerhouses.

AirAsia is perhaps the standout name on the list of blue-chip organizations named by Reuters as preparing a digital bank license application. The news agency says that the Malaysian budget airline is ready to ride the crest of a wave, which has seen several South-East Asian regulators open up their banking to digital operators, with mobile connectivity in the region widespread.

While AirAsia has not yet officially commented on the development, it is expected that the airline will use a consultancy that can offer expert guidance for its new venture in digital personal finance. Tune Group, AirAsia’s parent company, is involved in ventures such as the Caterham motor engine technology company, Tune Money, and Queen’s Park Rangers Football Club. Malaysia’s central bank will award the licenses by the end of June.

The survey tracks the rise of digital banks Down Under

Recent research by Mozo, the Australian personal finance and energy provider, has unearthed some vital statistics on the rise of digital banks – sometimes referred to as neobanks – in the Oceanic nation.

It has been found that one in four Australians have switched or are thinking about switching to a digital bank. The 18 to 34 age group has been pinpointed as the generation who are most in tune with new banking methods, as two in five Australians in this range already do most of their banking on a smartphone app. According to Mozo, its database shows that digital banks currently occupy the top four positions in its table of current savings rates.

According to Mozo, Australians rated security as the most important factor when it came to their digital banking experience.

Open Banking chief highlights slow UK progress

Imran Gulamhuseinwala, the head of Open Banking – a non-profit set up to try and smooth UK banks’ transition into the digital era, and in particular the secure customer data sharing which is now required by EU law – has expressed his confidence that UK banks will successfully transition to the digital era, despite a slow start.

Despite experts predicting a lucrative fintech revolution in 2018, it is believed that only a million Brits are using ‘Open Banking’, which can allow them to use many of the services and tools offered by today’s digital banks.

Mr. Gulamhuseinwala told the Daily Telegraph: “This has been a complex journey for many banks. I am actually relatively pleased with where we are today.”

Referring to the initial teething problems, namely, a lack of transactions, he highlighted: “I think there is some crucial functionality that’s missing. We have hardly seen any payments volume at all … of all the Open Banking activity, less than 0.1pc is payments-related. Payments hasn’t fired at all.”

Eventually, will the digital banking trend sweeping other parts of the world penetrate into the UK? Perhaps once marketing campaigns hit more of their targets, a groundswell of demand from the general pubic will prompt more Open Banking standards to be met.

Vive receives UK license

Staying in the UK, the digital bank Vive celebrates the awarding of its banking license from the Bank of England.

Among the bank’s new offering’s prominent features will be a fixed rate savings account, personal loans, and a money management app based on Open Banking. It appears that Vive’s target market will be customers who do not currently have access to affordable credit. It should be noted that Vive now possesses a banking license with restriction – which means that it is still subject to certain limitations, such as the amount it can take in deposits.

Nick Anthony, Vive’s CEO, said in a statement: “Vive is designed for people who want greater choice than that offered by their current bank. Our prospective customers value service, speed, and transparency but also want the best rates available to them.”

Vive is currently in a beta testing phase, with a full launch planned for the second quarter of 2020.

N26 celebrates five millionth customer

Let’s take our hat off to N26, as the digital bank platform has announced that it has reached the milestone of five million customers worldwide. Near enough five years, after they launched a mobile-only account option, the firm has reached this commendable landmark, which can be seen as an achievement for the digital bank sector as a whole.

N26 said in a statement: “As we enter a new decade, we’re delighted to share some more fantastic news. N26 has reached another impressive milestone in its journey, and we now have over five million customers banking with us around the globe! We’ve witnessed a huge amount of change over this time and today, we’re incredibly proud to be considered one of the key players in digital banking—bigger and better than ever before.”

The company had a reported 3.5 million customers on their books last summer, and so to hit the five million mark by early 2020 represents a sharp spike in sign-ups. Berlin-based N26 now operates in five countries, employing over 1,500 staff. Its stated aim is to attract 100 million customers all over the world.

That wraps up our first newsletter of 2020! Trust to keep you updated with the latest happenings from the fast-moving digital bank sector.