Fintech Insider Podcast by 11:FS
00:34:28 · Sarah Kocianski, Pranav Sood
[00:34:28] S1: Yeah. So I need to counter that and say that the Australian big four banks have some of the best apps in the world from incumbent banks. So in terms of differentiating from user experience, that is incredibly difficult over there. Because everything that Monzo did over here, the big four Australian banks have already done and done it better. But also, I do understand what you're saying, you know, it kind of... It doesn't it doesn't speak much to them. The other thing you have to... I think about the Australian market is that mortgages are the biggest thing in Australia. They are more obsessed with property perhaps than the Brits, and that's saying something. So they kind of... I think their strategy is they know that mortgages are the big goal. They know that consumers are really, really unhappy with the big four banks. They know that the big four banks are being punished at the moment on the mortgage side because of the mess ups they've made. So that's what they're trying to get to. Sorry. I was just gonna say if you look at Judo Bank, which has a model actually quite similar to Oak North, they've got, you know, fixed term accounts for for two point... 1.5% for five years, which isn't actually as good if it's these easy access accounts, which suggests that it is that mortgage side that they're trying to pull deposits in for. [00:35:33] S2: Yeah. No, I was gonna I think you basically said what I was gonna say, which is... Sorry. [00:35:36] S1: No, it's fine. I'm gonna be defensive about the Australians.
00:35:36 · Sarah Kocianski, Pranav Sood, Ross Gallagher
[00:35:36] S1: No, it's fine. I'm gonna be defensive about the Australians. [00:35:38] S2: No, but the other thing about Australia is that if you are going to pick a time to innovate in financial services, now is that time. All of the factors that you need, you know, the banks getting knocked up and down the high street by the Royal Commission, all the other stuff that's going on. And so I agree with you that yes, CBA and others have got pretty good digital apps, but they're also in the middle of an absolute bun fight right now. And so I think I just go back to Val's point which I kind of agree, you should be able to differentiate on more than just the rates that you're paying. [00:36:05] S0: It's easy to be cynical though isn't it? Mean look I totally take your point, future parity isn't parity. And when you've got someone saying we're trying to change the traditional banking model but actually they're relying on the same old acquisition hooks that all of the big banks rely on, it's easy to be cynical. But at the same time, I think you wanna believe in that sort of ambition and that they are actually trying to do something that... That's different.
00:36:05 · Ross Gallagher, Valentina Kristensen
[00:36:05] S0: It's easy to be cynical though isn't it? Mean look I totally take your point, future parity isn't parity. And when you've got someone saying we're trying to change the traditional banking model but actually they're relying on the same old acquisition hooks that all of the big banks rely on, it's easy to be cynical. But at the same time, I think you wanna believe in that sort of ambition and that they are actually trying to do something that... That's different. [00:36:25] S3: I mean, I guess the other thing that kind of jumped at me from the story was that they said that they've recently launched their series d funding round aimed at large investors. So my question is, what were they doing with series a, b, and c? I mean, if they haven't... If they've... All they've done so far is raise deposits, they haven't started doing any lending. What on earth do they need to do, you know, four rounds for?
00:36:25 · Valentina Kristensen, Sarah Kocianski
[00:36:25] S3: I mean, I guess the other thing that kind of jumped at me from the story was that they said that they've recently launched their series d funding round aimed at large investors. So my question is, what were they doing with series a, b, and c? I mean, if they haven't... If they've... All they've done so far is raise deposits, they haven't started doing any lending. What on earth do they need to do, you know, four rounds for? [00:36:44] S1: So as far as I understand it, and this is, kind of based on conversations I've had with people and sort of, you know, things that I've seen, actually, it's getting licensed. And the licensing process in Australia, whilst they came out and were very optimistic that they had learned a lot from The UK and were gonna be able to do things similarly, the bit between getting your restricted license and your full license has taken a hell of a lot longer and been a hell of a lot more resource intensive than any of those banks thought it would be. There are suggestions that that's deliberate by the regulator, they do not want too many new banks in the market too quickly. You have to remember how many people or rather how few people there are in Australia, they've got around 20,000,000. So I actually think that's where a huge amount of money has gone is it's been sucked up and just getting to the point where they're actually allowed to even take those deposits. Now they've gotten there. They're gonna take everything they can.
00:37:36 · Ross Gallagher
[00:37:36] S0: But... And I think that's it. Right? It's like they they have done that. They've done that very well, but actually, it's like where they go from here, I think that's really gonna that's really gonna define success. Absolutely. Sorry. I'm gonna move us on to our next story, which comes from AltFi and concerns Revolut allegedly applying for a UK banking license. So the challenger wants to get the license before the end of the year, obviously. It currently operates in The UK and the European banking license. In addition to solving passporting problems, the license would allow Revolut to hold its own deposit and bring its lending in house. This will be the company's first formal UK banking application. And last month, Revolut announced that it would move its European payment operations to Lithuania and to Ireland when the when The UK leaves the EU. So I guess if I were to put a question out there, it would be how much of this is about working around sort of future issues with passporting and then how much of it is about being able to sort of expand out that existing suite of of banking products and services?
00:38:36 · Sarah Kocianski
[00:38:36] S1: So what people listening to the podcast can't tell is that I pulled a a big face at Ross there. It doesn't operate in The UK on a European banking license, operates in The UK on an e money license. It has a it has a banking license from Lithuania, but it does not operate on that. And in fact, it doesn't have any full stack banking services live. So, you know, that that is a quite an important difference, particularly when you look at what's happened in '26. The other thing I think is interesting just in here is that the first formal UK banking application Sure. There have been rumors abounding for a very long time. River... Been trying to do this forever. Mean,