Thursday, 09 July 2020 10:08

Digital bank 86 400 getting set for series B capital raise

By
Robert Bell, the chief executive of digital bank 86 400. Robert Bell, the chief executive of digital bank 86 400. Supplied

Digital bank 86 400 says it has entered its next phase of growth a year after being granted a banking licence and will try to devise new ways for customers to profit from their money.

With this in mind, the bank said in a statement it would soon begin a Series B capital raise by continuing to work with Morgan Stanley, adding that there had been strong early interest from sophisticated Australian and international institutional investors.

The bank closed a successful Series A round in April, raising $34.5 million and taking the total capital raised to $90 million.

It said its main achievements during the last 12 months were:

  • Completed rollout of everyday banking products, and began to develop over the top products that one would not expect from banks;
  • Became the first to offer digital mortgages;
  • Hired 10 extra people since lockdown began;
  • Rolled out five new products after lockdown began; and
  • Completed a major upgrade to core technologies during lockdown.

The statement said 86 400 now had more than 225,000 accounts and was ahead of target to reach 500,000 by the end of the 2020-21 financial year.

It has taken in more than $300 million in customer deposits and processed more than $1 billion in transactions, with 650,000 transactions and balance updates each day.

“With so much economic uncertainty at the moment, it’s more important than ever Australians feel on top of their finances," said chief executive Robert Bell.

"Our next phase of growth is going to do just that – deliver the features they wouldn’t expect from a traditional bank, which will help customers budget better, spend wiser and save more.

"And with great interest rates, and smart features like our upcoming bills prediction and Energy Switch, we’re confident we can help each customer save as much as $3000 over the next 12 months.

“Australians have long called out for a smarter approach to banking, and together that’s exactly what we are building.”

The statement said 86 400 had received more than 10,000 pieces of customer feedback, including email suggestions, votes on its public roadmap and NPS survey responses.

All had helped develop the products and experiences already available. With a Net Promoter Score of 47.4, 86 400’s customer satisfaction levels are claimed to be top of the market for a financial services firm, and well ahead of the Big Four banks’ average of 2.8.

“In a year full of achievements, one we’re most proud of is team engagement,” said chairman Anthony Thomson. “Take it from me, building a bank is not an easy thing to do and it’s great to see the number of those who’d recommend 86 400 as a place to work has risen three-fold since licence. Add this to our incredible customer satisfaction scores and it's clear we must be doing something right.”

The 86 400 team has increased by more than 25% since receiving its licence, from 85 in July 2019, to 109 full-time team members in July 2020.


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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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