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The Australian Competition and Consumer Commission (ACCC) has announced that it will not oppose the plans of NAB to acquire neobank 86 400.
The decision came after the commission conducted an examination of the proposed acquisition. It has consulted other banks, non-bank lenders, mortgage brokers, fintechs, and other industry players and found that competition will not be affected should NAB pushes through the acquisition.
86 400, which launched in 2019, was granted a full license the same year. It differentiates itself from other neobanks by not using any existing legacy or infrastructure systems used by current financial institutions in the country.
NAB plans to integrate the experience and technology platform of 86 400 to its own digital bank UBank. Les Matheson, NAB chief operating officer, said this will enable the major to develop a leading digital bank that can “attract and retain customers at scale and pace”.
“The combined business will deliver accelerated innovation and an enhanced customer experience to create a stronger and more competitive banking alternative for Australian customers,” he said.
NAB already holds an approximate 18.3% shares in 86 400, having participated in the neobank’s Series B capital raise.
Rod Sims, chairperson of ACCC, said the planned acquisition is similar to the move by several banks and non-bank lenders outside the big four that have already invested in their technology and service offerings to improve user experience.
"Market feedback suggested that while 86 400 is innovative, particularly in reducing the time and effort in completing home loan applications, there are a number of other businesses with similar offerings or the ability to replicate them. These other competitors continue to bring a similar disruptive influence to the market," he said.
However, Sims assured that while this acquisition is unlikely to substantially lessen competition in the market, the ACCC will continue to investigate proposed acquisitions of emerging competitors, particularly by major banks.
The two recent home loan price inquiry reports by the ACCC have shown that competition between the big four banks has been "muted at best".
"They tend to accommodate each other rather than competing strongly to win market share. Therefore, any acquisition of a rival or potential rival by any of the big four needs to be very closely considered," he said.
