Avenue Bank granted full banking licence

Australia has landed a new bank as Avenue Bank has its restrictions lifted by the Australian Prudential Regulation Authority (APRA).

The neobank was granted a full licence to operate as an authorised deposit-taking institution (ADI) without restrictions on Monday.

The new bank focuses on easing a significant pain point for small businesses, securing bank guarantees for landlords.

Avenue Bank said it’s the first Australian bank to focus on specialising in bank guarantees and is only dedicated to helping Australian businesses.

Under the new bank, digitally enabled guarantees have a turnaround time of as little as 24 hours compared to the standard two months.

Back in September 2021, the bank was first granted a restricted banking license prior to onboarding its first set of customers under a limited banking business authorisation in November 2022.  

The bank had since operated under a restricted ADI license.  

The new bank could signal a resurgence of banks entering the market after many neobanks of the past fell flat or were absorbed by other companies.    

Avenue Bank CEO Peita Piper told Digital Nation, “It will be an interesting one to watch… the barriers to entry are very high, and currently there are only two applicants in the restricted banking pathway. 

Since APRA switched up its banking regulations in 2018, it paved the way for more neobanks to operate in Australia. 

However, the optimism of new entrants challenging the big banks soon gave way to the realisation establishing longevity might be harder to accomplish.   

July 2022 saw Volt Bank hand back its banking license to APRA due to issues with raising funds while neobank Xinja, handed back its banking license at the end of 2020 for similar reasons.

Meanwhile, 86400 was eventually acquired by NAB and absorbed into the major banks own neobank offering, UBank.