Australia’s newest digital bank, Up, believes it can thrive in an already saturated market where the big four banks are well entrenched. According to the company’s founders, to attract notoriously sticky banking customers Up plans to double down on its agility and customer experience.

Backed by Bendigo Bank and Adelaide Bank, Up launched this week as one of a growing cohort of “challenger” or “neobanks”, initially offering accounts and transactions services largely through its mobile app. The pitch to customers is experience, a lack of friction and innovative digital features.

During the company’s launch event in Sydney yesterday, the experience of combining those things did indeed prove appealing. But maturing to a point where Up can offer loans – where banks make their money – will require the new bank to eventually pry away some of the big four bank’s 47 million customers.

According to a background paper prepared for the ongoing Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Australia’s biggest four banks currently hold around three quarters of the assets held by authorised deposit-taking institutions (ADIs) and control around 80 per cent of home loans.

Up founder, Dom Pym, says the big four’s advantage means it will be difficult for the digital bank to ever compete on price alone.

“They have much deeper pockets than we do… they’re making billions of dollars profit,” Pym told Which-50 following Up’s Sydney launch event.

“If you look at those organisations we can never compete with them on price. So we don’t intend to.

“We’ll always have a competitive price but it will probably never be the best. It’s not a race to the bottom for us. We think you can get more value out of the features that we offer, which are actually better than the price.”

These features are delivered through the Up app utilising push notifications, Apple and Google Pay, and Siri voice assistant – digital features Australia’s major banks, with some notable exceptions, are yet to fully utilise.

Those features include allowing Up customers to sign up for a new account and begin spending in around two minutes, enriching transaction data to provide a more useful transaction history, the ability to anticipate bills and adjust budgets accordingly, and a round up feature where change to the nearest dollar is automatically deposited into one of several savings accounts.

The guiding principal for Up is to “connect people to spending” in a time where contactless payments and automated billing have arguably done the opposite.

Essentially Up is offering the features many expect open data and open banking will usher in. A key difference, however, is Up is offering those features as a bank now rather than as a third party when consumer data becomes more portable.

Standing Out

Up’s newest feature is a case in point. This week the bank announced it is partnering with AfterPay on “Smart Receipts”. The feature means online AfterPay purchases will now display in the Up app with information on exactly which items were purchased and how many payments are remaining (AfterPay is a payments service allowing online shoppers to buy products and defer or break up payments over several weeks).

Features like Smart Receipts and frictionless on boarding are where Pym says Up will ultimately find its competitive advantage and help “trigger the switch”.

“The unique things are where we think we can really differentiate,” Pym said.

“Things like [AfterPay receipts] we can bring them that no other bank has. We think those unique things – we won’t have them forever [because] others will follow very quickly – our idea is to be a pioneer and to stay ahead.”

Pym worked with two of the big four in recent years and the cofounder says he is familiar with their “inner workings”. He said Australia’s incumbents are some of the most innovative in the world but they share a regulatory and legacy system burden, ultimately making them “cumbersome”.

To stay ahead of larger banks Up is relying on what most fintechs are – speed. The new bank claims to release deployments five times a day to customers.

“An average bank might do that once every two weeks or once every three months. For us we can iterate so quickly that even when others are catching up to us we can just keep moving forward.”

Of course, the challenge for Up and other “neobanks” clamouring for banking customers is convincing them to trust Up with their hard earned. At least, that is what incumbents would argue.


Pym says Up’s security is “the best in the business” and they take a similar approach to security as to banking features – “We look at bank grade security and just want to do better”.

Trust, meanwhile, will be built over time and the bank is relying on its network of partners for initial confidence.

MasterCard partners on Up’s physical cards, Google Cloud provides infrastructure and part of the tech stack, while Bendigo Bank and Adelaide Bank are Up’s industry backers, providing the licensed financial products. Pym also noted, Up will look to leverage the trust it has built as the team behind the Bendigo Bank mobile app.

“It’s not [just] a fintech building this. It’s a fintech with a network of partners and those partners are already trusted,” Pym said.

“1.7 million Bendigo Bank customers trust us everyday. So we’re in a really good position, more than other fintechs.”