Australia Neobanking Market – Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Australia Neobanking Market – Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The market is poised to grow at a CAGR of greater than 10% by 2027. In Australia, the fintech sector matures and rebounds, with investments coming from a diverse spectrum of sub-sectors and investor groups. Neobank activity continued following the 86 400 / NAB transaction in H1'21, with Judo Bank successfully launching on the ASX and Alex Bank completing an AUD20 million investment following the acquisition of its restricted banking license (RADI).

Three neobanks were awarded licenses by APRA in the run-up to COVID-19, signaling potentially intriguing new developments in the sector. Neobanks are online-only banks that offer alternatives to traditional banking. However, they must create a customer base and generate capital, which may have been challenging while international economies adjusted to the global health crisis.

Most notably, Xinja, which got a banking license in 2019, shut down its banking activities due to COVID-19 pandemic issues and failed fundraising from a Dubai-based investment fund. As a result, the Australian prudential regulation body has raised regulatory standards for Neobanks seeking a banking license, thereby resuming Neobanking activity in the sector.

Over the year, Australia experienced a steady comeback, with fintech investment exceeding USD 1.5 billion in H2'21 and total investment for the 2021 year exceeding USD 2.5 billion, nearly matching the pre-COVID highs observed in 2019. (USD 2.6 billion).

The investment was made in a variety of subsectors, with major investments in the payments area coming from Airwallex and Till Payments, which raised a total of USD 300 million and AUD 125 million throughout the time.

Neobank activity continued following the 86 400 / NAB transaction in H1'21, with Judo Bank successfully launching on the ASX and Alex Bank completing an AUD20 million investment following the acquisition of its restricted banking license (RADI).

Digitalization is sweeping the globe, especially in financial activities, and has reached the banking industry. Mobile payments or payments are done with a mobile electronic device such as a phone, a smartwatch, or a tablet and are a viable alternative to cash, checks, or conventional debit and credit cards.

Australia is rapidly transitioning to a cashless society. Consumers' preferred method of payment was cash just over a decade ago. However, the adoption of digital payment systems, particularly debit cards, has gained popularity and is quickly becoming Australia's preferred means of payment. Newer alternative payment mechanisms, such as e-wallets and mobile payments, are gaining market penetration in addition to debit cards. The COVID-19 epidemic has expedited some of these technologies by encouraging firms to accept non-contact payment methods and offer online e-commerce. As mobile payment solutions become increasingly widespread and integrated within social media platforms, Australia is expected to increase mobile POS payments.

The report covers major players operating in the Australia Neobanking Market. In terms of market share, few major players currently dominate the market. However, with technological advancement and service innovation, domestic to international companies are increasing their market presence by securing new contracts and tapping new markets. It has major players, including Up, Alex, Volt, BNK, etc.,

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