As 86 400 marks its one year anniversary, how is neobank awareness tracking?

  • By Luke Gregerson

As many of us in the financial services industry are aware, 86 400 was one of several new digital-only banks or ‘neo-banks’ to launch in the back half of 2019.

However, one year on from the launch of 86 400, RFi Group data shows awareness of these neo-banks remains relatively low, although awareness of 86 400 has increased from 1 per cent in June 2019 to 7 per cent in June 2020.

RFi Group data shows just over 3 in 10 consumers (31 per cent) find the concept of a neo-bank appealing (6+/10) to use.

Of these consumers who find the concept of a neo-bank appealing, more than 4 in 10 (45 per cent) say they are interested because they perceive these banks to be likely to offer them a better deal or rate.

In fact, according to chief product and marketing officer Travis Tyler, 86 400 set out to build a new type of bank, which would actually help Australians feel in control of their money, rather than profit from their mistakes.

“After a year in market, all the evidence shows we’re already making good on that purpose – but there’s plenty more we can do, and we’re just getting started," Tyler said.

86 400 estimates the amount of money it has saved some of their early customers would be likely to exceed $3,000.

86 400 comes to this estimate as a result of their rates offered on mortgages, various new savings tools and features as well as earning the monthly bonus interest.

Where are the savings being made?

The $3,000 in savings includes an extra $200 in bonus interest1, with over 90 per cent of deposits held with 86 400 earning bonus interest each month.

Australians who have bought or refinanced their home with 86 400 are up to $2,300 p.a.2 better off, with approval times in as little as a few hours.

Another feature which helps 86 400 customers financially is the commission-free Energy Switch service that has already identified $270,000 in energy bill savings since it went live in March 2020, with over 70 per cent of those who used the service finding a better deal, and an average saving of $200 per annum.

RFi Group data indicates this is a feature which resonates strongly in the market as just under 3 in 10 consumers (29 per cent) indicated they find a service that can analyse your electricity bills and determine whether there is a better deal on the market to be highly appealing (8+/10).

And finally, customers using 86 400’s ‘Coming Up’ feature have seen savings up to $550 from cancelling unused subscriptions and avoiding late fees.

RFi Group data demonstrates that a push notification warning customers when a bill is due or upcoming is a savings tool that resonates strongly in the market, with just over 3 in 10 consumers (31 per cent) indicating that they find this service highly appealing (8+/10).

And it seems that customers are embracing 86 400’s innovative features.

According to the neobank, over 255,000 accounts are now on the 86 400 platform with more than 650,000 transactions and balance updates made on the app each day.


 

(1)    This is based on a balance of $28,000 and compared to what customers would have earned with the big four.

(2)   Calculations are based on savings in the first year on the average loan size of $363,775, over a loan term of 25 years


Luke Gregerson is a research analyst at RFi Group