Digital Bank Disruption?
Rather than disruption, Douugh's CEO says the new neobanks are just a natural evolution of the current banking model.
There's been a lot of noise surrounding the new digital banks that have been popping up over the past year, with some bold claims around disrupting, innovating and revolutionising banking as we know it in Australia. And yes, players like Up, Xinja and Revolut have some pretty cool mobile app features. But is this disruption?
Finder spoke with CEO of Douugh Andy Taylor who does not believe that it is. He says a lot of the new neobanks are focusing on innovating the customer experience part only, which is the consumer-facing app. But he says they're not necessarily innovating the banking business model as they're ultimately offering the same products as a traditional bank, such as transaction accounts, savings accounts and home loans.
"It becomes all about a price play point in my mind. They're saying, 'We're mobile banks so therefore we have no traditional legacy distribution channels. Therefore we can be cheaper, so we're going to sell home loans cheaper'. That's not my definition of disruption, that's just price improvement," says Taylor.
"This neobank term is getting bantered around, but we've never really seen ourselves as a neobank. We're not looking to become a bank, we believe that's the wrong way to go. And the reason being is that we're actually trying to innovate the business model of banking."