The Rise of Virtual Banks (AKA NeoBanks)

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Insights From MCA Accountants

The Rise of Virtual Banks (AKA NeoBanks)


To put it simply, Virtual = Online. It is a bank with no physical branch.

While all banks have online capabilities, a virtual bank is designed from scratch to work via the web (be it on a computer or a phone app). The entire process of applying for an account, confirming your ID, etc is online.


Exactly what I asked when I first heard of these virtual banks, and then I tried one…

Have you gone through the arduous process of opening an account with a traditional bank? And then heaven forbid you want to add a card to that account (how dare you want that)… In 5 minutes I had a transaction account with a card attached (both physical and a virtual one on my phone to use via Google Pay) and a savings account earning interest at above 1% (doesn’t sound like much, but try getting more out of a traditional bank). These were also linked to a PayID seamlessly.

The entire process was done via the mobile phone app. No filling out forms and dropping them off at the branch, no waiting, no fuss. 30 minutes later I had purchased my lunch using my phone from my new account (I had to transfer money to it first of course).

So why would I use one? Because a virtual bank has been designed for our modern online world. Traditional banks are still largely paper based and their technology footprint is a complete mess of bits and pieces that are paper based and adopted for online use – and that simply doesn’t work.


Virtual banking in Australia has only been around for a year or two thanks to regulatory changes in 2018 and they are still developing and widening the services they provide, so for a while at least a traditional bank will offer a wider range of services as well as offer people that you can see and talk to.

Virtual banks appear to be focusing on individual savings and transaction accounts at this point, so if you are after a no fuss personal account with a card you can use anywhere – then you should consider a virtual bank.

If you run a business there are options, but these appear to be in testing phases and not ready for day to day use.

Some virtual banks also offer loans, and non-bank lenders have been around for a long time now so this market is mature – just don’t confuse a loan from a virtual bank with a loan from a payday lender. Loans from virtual banks are “proper” loans with good interest rates and are competitive with bank loans.

So should you use one? Possibly yes – if you are OK with the concept of everything being online (including your communications with the bank) and you are after a no frills personal account (a good way to test the water if you ask me).


Google “virtual bank” or “neobank” and you will get options. A small list we have knowledge of (without wanting to provide any recommendations) is:

  • Up
  • 86400 (yes, that’s the bank’s name)
  • Judo Bank
  • Revoult
  • Volt

There are more than this out there and you should do your reserch before choosing any virtual bank.

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