APRA Grants Neobank Xinja Unrestricted Banking License


The business name Xinja (pronounced as ‘Zinja’) came from the genius idea of having a name that has a ‘zing (or ‘xing’!) that also connects with Ninja. Hence, the catchphrase “Xinja is your money ninja- we’re fast and we’ve got your back.”

Sydney-based neobank Xinja has received its full, unrestricted banking license from the Australian Prudential Regulatory Authority (APRA) earlier this week. Xinja is one of several neobanks that have hoped for a new restricted banking license by the APRA.

“From today, we’re rolling out bank accounts to customers,” said Eric Wilson, Founder and CEO of Xinja.

Passionate about bringing a great banking experience to Australians, Wilson has focused on the tech-savvy 20-something customers pitching the 100% digital bank’s mobile design difference from NAB, CBA, ANZ, and Westpac, aka the Big Four.

Late last year, Xinja has bedded down its SAP S4B core banking system, an SAP-integrated banking package on S/4HANA that the vendor created for the challenger-banking sector. The completely cloud-based greenfield institution believes that by securing customer loyalty with a superior user experience unfettered by legacy, it will be able to gain a strong foothold in the market.

SAP-powered Xinja Competes

The rapid launch of neobanks or cloud-based ground-up builds on post-internet architecture with distinctive product portfolios poses as threats to the major players. For Xinja alone, its capabilities to open new accounts within seconds, seeing payments in real-time and offering biometric security are game-changers in the banking industry.

Carrying the burden of legacy systems, neobanks’ established rivals have been experiencing a backlash from the recent Royal Commission remediation and compliance costs which affected their project talent and innovation budgets. An unintentional advantage for digital banks.

As in the case of Suncorp, the established bank has been noticed to be struggling with its core systems legacy. The institution has also been conducting customer experience and product revamps alongside the recent appointment of Suncorp’s new CEO Steve Johnston who took over the role from Michael Cameron. Cameron has been known to drive the bank’s API-led marketplace strategy and digital transformation.

Meanwhile, earlier this year, ANZ had announced that it has paused the expansion of its massive agile transformation to focus on improving its existing program instead of pushing it beyond the current 9000 employees. It has to be noted that ANZ’s tightening in home lending criteria collided with a mortgage application automation drive, causing a conspicuous bleed in mortgage book market share to rivals.

What’s common about ANZ and Suncorp is their core banking systems. Both banking institutions run the veteran Hogan core banking platform, which is previously owned by Computer Sciences Corporation and now run out of DXC Technology. 

Xinja boasts of its “zero legacy systems” while it zeroes in on its target market, the youth. This is a solid proposition against its older rivals.

CEO Wilson explained:

“We don’t have bricks and mortar branches or old technology that we are constantly patching to meet the needs of customers. Our costs will be significantly lower than traditional banks.”

With the Aussie neobank’s plan of scaling, it will be able to lower its cost base resulting to a better cost-to-income ratio and bigger margin, enabling the bank to come up with cheaper yet superior product offerings.

Now that APRA has officially granted Xinja a full, unrestricted banking license, the neobank is well on its way to ‘race to the top’ in the data-driven personalised services and, hopefully, soon to reap its ROI on the $1.8 million investment in the SAP-based core banking system.

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