Neobank Douugh is looking to list on the ASX, which would mean it would be the first neobank to hit the Australian Stock Exchange boards.
The Australian Financial Review has reported that Douugh, which has only be operating since early 2016, is looking to list. Founder Andy Taylor has made quick progress with the business – he was also a co-founder of Australia's leading peer to peer (P2P) Lending platform SocietyOne.
The idea of Douugh is that it uses a 'virtual assistant' called Sophie to help with managing money with insights and recommendations. The app allows you to do your normal banking needs, set spending targets and set up 'savings jars'.
The Douugh listing is on course to happen in around a month from now with the company waiting to raise $10 million from the listing.
At the moment the difference between Douugh and other neobanks is that it links with other deposit-taking institutions and use their banking licence whilst still being able to offer full bank accounts.
Whilst the transaction account is free, it will also offer a premium subscription where customers can invest in low, medium or high risk assets with shares and treasury bonds.
The business won't be launching its local offering until next year due to the open banking delay to February 2020, but the US is the first place where it will start. But it has no intention of selling debt or operating a large balance sheet. That sounds like a wise idea to me.
Foolish takeaway
Over time the large amount of challengers to the big banks of Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ) could see a sizeable decline of earnings for them as competitors nibble away at the edges.
With so much new competition, I think profit growth for the big banks will be sluggish at best.
