The Australian Prudential Regulation Authority (APRA) has granted Alex Bank the authority to trade as an unrestricted authorised deposit-taking institution (ADI).

In July 2021 it was granted a restricted ADI. A restricted ADI is granted for a maximum period of two years so banks can get their policies and framework up to scratch.

One of the requirements is having a Capital Adequacy Assessment Process (ICAAP) document.

This is essentially a framework of models running scenarios of potential risk events in different growth environments.

In that time, the number of deposit products it can offer is limited - like P Plates on a drivers licence.

Alex Bank currently offers personal loans, and a limited-release savings account offering 3.40% p.a. with the aim of opening this up to the public.

It now aims to release a series of term deposit products.

"This is a proud moment for the entire Alex Bank team. It represents the culmination of several years of hard work and enables Alex Bank to accept deposits and scale our business," CEO Simon Beitz (pictured, centre) said.

It's been a tough time for neobanks over the last couple of years, with 86 400 purchased by NAB and later absorbed into UBank, and Volt handing back its banking licence in mid-2022.

Volt had no live products, with its savings account in beta for more than three years.

In 2021, shortly after NAB announced the acquisition of 86 400 and Xinja folded, APRA changed the guidelines on how it grants banking licences, essentially making it more onerous with a push for sustainability rather than short-term profitability.

The state of neobanks

Brand Founded Fate
Alex 2018 Granted full ADI in December 2022, offers personal loans and restricted run of savings accounts
86 400 2017 Acquired by NAB for approx $220m, absorbed into UBank in May 2022
Judo 2016 Offers term deposits and business loans
Up 2018 Offers transaction and savings accounts, shares ADI with Bendigo Bank
Volt 2017 Granted ADI in 2019, folded in mid-2022, no live product, returned all customer deposits in July 2022
Xinja 2017 Granted ADI in 2019, folded in early 2021, returned all customer deposits