CHOICE membership

Neo banks - would you trust them?


#1

Big tech players like Facebook and Google seem to be ready to shake up the banking industry. However, what are the risks and would you trust them?

Add your thoughts in the comments below.


#2

Wouldn’t use them mainly because of the of the last paragraph in the Choice assessment - Trust.

It has been proven (time and time again) that the companies which plan to enter the neobanking space can’t be trusted with one data. Adding financial data to the pile of data they manage on behalf of their users is even more concerning as I imagine that this data will be shared with other parts of the same business to better profile its users.

At least at the moment the bricks and mortar banks don’t flog off ones financial information to anyone willing to pay for it.


#3

I’m old school. If there is a problem, I want someone I can talk to. Is there is dedicated direct communication channel that can be used if there is an issue, or do you play call centre roulette and end up with staff who have no idea and no answers?


#4

Having observed:
A) How little respect they pay to much larger nations like the EU and how the EU has needed to respond to each of them across a broad range of concerns,
and
B) How little impact our Australian Government is likely to have or ability to control their enterprise.

Why would you bother!

Any one of the four might fail under duress from the EU or the US Govt. If they really pushed the point, where would any Aussie creditor rate in the outcome, under the laws of a foreign country? The same goes for many foreign banks of course? Except they are not exposed in the same way as the other four.

Is a Neo Bank really another descriptor for “Credit provider”?
EG AMP and ING offer banking that is digital only.
While everything they hold may be measured in dollars or equiv, in the end is it just them offering credit to a third party you want to transact with? How do they assure the security of your savings?


#5

In Australia under Australian law our funds are guaranteed by the Australian Government up to 250K for each individual Australian Bank Account - you do not get that guarantee outside the country
Portugal and Greece had all of their Bank Accounts “frozen” when the country was practising austere accounting and tightening their belts… I want to know my money is safe and I can get it when I need it.
.


#6

OT or not? Digital only is not the same as online only. ING Direct has a walk-in ‘lounge’ in Sydney as well as a fairly robust call centre. It is a subsidiary of the Dutch ING Group and is registered in Australia as a bank and operates as one. They provide full function banking services, even if not as broad as some.

FWIW I spent a few years with Bank of Melbourne and their shop-front staff often had to do many minor things through the call centre and often asked why I did not just ring their call centre myself. It seemed the branch staff could instruct on using the ATM, take deposits, pretend the tellers were ATMs for withdrawals, ‘sell’ and ‘buy’ coins, help fill out forms, and (try to) sell insurance. With ING I know to just ring (or email) or use the app and overall have encountered equal or much better service than from BoM, as well as perks including higher interest for my online savings and not being dudded by those pesky 3% off shore/currency fees.