In under three weeks, a challenger bank has seen 15,000 customers make $100m in deposits – “smashing its business plan many times over”.
Xinja Bank launched its new digital bank account Stash on 15 January, with an ongoing interest rate of 2.25% from the first dollar invested up to a maximum of $245,000.
According to Xinja CEO and founder Eric Wilson, the staggering figure shows that consumers are not only willing, but excited by “the opportunity to embrace the digital banking revolution”.
“More than half of the deposits have come from Australia’s big four banks, a very strong signal that consumers are keen to embrace digital banking, get a great rate on their money and are no longer beholden to the banking oligopoly that was shown in such a bad light during the Hayne Royal Commission,” he said.
Wilson believes the account’s success is partially attributable to the competitive ongoing rate on offer without the typical restrictive conditions seen elsewhere.
“At a time when the big four are slashing their deposit rates, we are providing a very competitive return whilst turning the high-cost, high profit model of Australian banking on its head,” he said.
There are no strings attached to the Stash savings rate – with no introductory period, no mandatory monthly top-up amount and no minimum deposit.
“We’re designing our product roadmap with our customers and I’m delighted to see that this is something our Xinjas are embracing, showing patience around and taking full advantage of,” said Wilson.
Home loans are among the most frequently requested products the new customer base has requested for the future.
Last week, Commonwealth Bank CEO Matt Comyn admitted he’s opened neobank accounts himself in order to better understand how the disruptors operate and what they provide to consumers.
According to Wilson, this is “telling” and highlights the pressure the majors are under to show the public what they offer, amidst the trust and reputational issues still lingering from the royal commission.
“Clearly the big four are rattled,” he concluded.
