How Australia’s virtual banks compete with the giants

There has never been a better time to launch a bank in Australia.

After a lengthy government enquiry last year uncovered high-pressure sales tactics and flagrant misconduct by many in the industry, the country’s incumbent commercial banks are scrambling to rebuild their reputations.

Much of the evidence tabled at the Royal Commission related to the four biggest banks ANZ, Commonwealth Bank of Australia, National Australia Bank and Westpac who were shown to have used their size and distribution power to stifle competition. Customers complained bitterly about being charged high fees for average service, or in some cases, no service.

For a long time...