Neobank Volt is closing down and returning its banking licence after failing to raise funding from investors.
One of Australia’s first neobanks made the announcement on its website on Wednesday, saying it had been "unable to secure the funding needed to continue.”
“With regret, we are announcing that Volt will be closing its deposit-taking business and intends to return its banking licence," the neobank said.
“Our priority now is to ensure account holder funds are returned to account holders as soon as possible.”
The neobank is urging “all customers [to] stop using their accounts immediately” and withdraw their balances by the July 5.
“Volt is doing everything possible to return the 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 licence to operate as an authorised deposit-taking institution.”
The regulator said the bank’s “decision to exit the banking industry and pursue other business opportunities is a commercial decision for Volt” and that it will monitor the return of funds to customers.
Volt CEO Steve Weston said that “in reaching this difficult decision, we have considered all options but ultimately, we have made this call in the best interest of our customers.”
Volt has begun to sell its mortgage portfolio and started the process of returning all deposits to customers in full.
Weston said “the entire Volt team is deeply disappointed to have reached this point."
“We are enormously 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 Australia’s first neobank to receive an unrestricted Authorised Deposit-Taking Institution (ADI) license.
In November 2021 Volt announced a partnership with fintech Frollo to launch a new banking-as-a-service (BaaS) platform designed to offer white-labelled products out of Volt’s own banking system.
It also worked closely with money management platform Parpera and Railsbank, trading locally as Railspay, to gain access to Railspay’s embedded finance features in Australia to launch a BaaS product.
Volt’s closure follows neobank Xinja which shut its doors in 2020.