Probable rates on term deposits above 5%
A digital lender to launch an online neobank in New Zealand with “attractive products” for customers.
New Zealand’s first fully digital bank, slated to launch next year, is expected to be able to offer high-yield term deposit rates of over five percent, the company told the origin of the concept.
Edward Recordon, CEO of NZFintech, said he is preparing to start a neobank in 2022 and expects his term deposits to be one of our “very attractive products”. He says the neobank aims to offer rates above five percent depending on the amount invested and the length of time.
“New Zealanders can’t access this kind of return through traditional banks (these have hovered around 1% for some time) and I’m sure it will be a very popular feature.”
Recordon says lower overheads, diverse product offerings for consumers, and fully digital operations are key factors enabling higher term deposit rates for customers.
Neobanks have no branches and operate entirely online. They offer apps, software and other technologies to streamline mobile and online banking with flexible and scalable cloud technology.
“Neobanks aim to offer more to customers,” Recordon says. “More flexibility in the way they deal, more information about their financial affairs and more money in their pockets (with no transaction fees and higher returns for depositors.”
In addition to the higher term deposit rates, Recordon says there are a number of other features the digital bank will offer, including intelligent reporting and AI services to help customers budget and manage their bills. in real time.
There are also traditional low-cost banking services, including international transfers, early access to paychecks, and other consumer credit products such as vehicle finance “all wrapped up in a dynamic user-friendly interface. and intelligent “.
Recordon said that NZFintech, a Christchurch-based digital lender that has grown into digital vehicle finance in recent years with Zooma.co.nz, will reveal the neobank’s brand and take customer details for early enrollment. in spring.
According to him, as the financial landscape evolves towards a fully digital customer experience, a gap has grown between what traditional banks offer and what a neobank can create – and get to market quickly.
“We have long aspired to be a leading digital bank in New Zealand, challenging existing institutions that have stifled innovation and market competition in this country for too long.
Around 256 neobanks exist around the world according to a study by Exton Consulting, a strategy and management consulting firm for the financial sector based in Paris. Their increase was eagerly awaited, although an NZ Herald report earlier this year found that two of four new neobanks in Australia left the market after obtaining restricted banking licenses.
Recordon says where other neobanks have struggled is with commercial delivery, like monetizing their services.
“Our evolution as a business has come from developing fintech lending products that meet Kiwi’s day-to-day needs – and our entry into neobanking after having already gained years of experience and success in finance.”
When asked if the planned neobank has a license, Recordon said the information is commercially sensitive, “but is obviously a prerequisite for operating a full-fledged bank.”