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Australia's Volt shuts down

Wednesday 29 June 2022 15:28 CET | News

Australia-based online-only Volt Bank has announced it would shut down, returning deposits, and selling its mortgage book after failing to raise sufficient funds to support the business.

Its collapse is a further blow to a business model that the Australian government and regulators promoted heavily after a 2018 inquiry into misconduct in the finance industry led to a loosening of rules for new banking entrants.

Rising inflation and interest rates this year have made it harder for online-only banks, called neobanks in Australia, to compete with established lenders, making fundraising much more difficult.

The company had AUD 113 million (USD 78 million) in deposits and AUD 80 million of home loans as of April 2022, a tiny fraction of the AUD 3 trillion mortgage market. The company said no customer would be left out of pocket.

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Keywords: digital banking, online banking, neobanks, digitalisation
Categories: Banking & Fintech
Companies: Volt
Countries: Australia
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Banking & Fintech

Volt

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