Neobank Volt closes and surrenders its banking license after failing to raise funds from investors.
One of Australia’s first neobanks made the announcement on its website on Wednesday, saying it had been “unable to secure the necessary funding to continue”.
“With regret, we announce that Volt will be closing its deposit collection business and intends to surrender its banking license,” the neobank said.
“Our priority now is to ensure that account holder funds are returned to account holders as soon as possible.”
The neobank urges “all customers [to] stop using their accounts immediately” and withdraw their balances by July 5.
“Volt is doing everything possible to return deposits in an orderly and timely manner. The Australian Prudential Regulation Authority (APRA) is closely monitoring this process,” the bank said.
APRA noted Volt’s intention “to return all funds to depositors and ultimately relinquish its license to operate as an Authorized Depository Institution.”
The regulator said the bank’s “decision to exit banking and pursue other business opportunities is a business decision for Volt” and that it will monitor the return of funds to customers.
Volt CEO Steve Weston said “in making this difficult decision, we considered all options, but ultimately we made this call in the best interest of our customers.”
Volt has begun selling its mortgage portfolio and has begun the process of returning all deposits to customers in full.
Weston said “the entire Volt team is deeply disappointed to have come to this.”
“We are extremely grateful to everyone who believed in what we were trying to achieve and worked tirelessly to make Volt a success,” he said.
In 2019, Volt was the first Australian neobank to receive an unrestricted Authorized Depository Institution (ADI) license.
In November 2021, Volt announced a partnership with fintech Frollo to launch a new banking platform as a service (BaaS) designed to offer white label products from Volt’s own banking system.
She has also worked closely with fund management platform Parpera and Railsbank, locally operating as Railspay, to access Railspay’s integrated finance functionality in Australia to launch a BaaS product.
Volt’s closure follows neobank Xinja which closed in 2020.