Looking back, Steve Weston says, that Volt Bank, an innovative new player that intended to crack open the Australian banking oligopoly, was well positioned to show that banking could be done in a better and more ethical way. Unfortunately, it wasn’t to be. 

“There was no one else in Australian banking that was doing what we were doing. We built something that didn’t exist elsewhere,” Steve says.  

“I’m proud of so much, but I’ll take to the grave that feeling of disappointment of having to close the doors. We were so close to a full launch and being able to show everyone what we had built.” 

It’s this kind of benevolent aspiration that characterises Steve, Volt’s founder and chief executive. The very same thing that prompted former customers to write to him, not in anger but in sympathy, following the collapse of the neobank in June last year.  

Volt Bank returned $100 million in deposits to all customers and handed back its banking licence after it couldn’t raise enough capital to scale up its operations, leaving 140 staff and a despondent Weston in the aftermath. Everyone was disappointed.  

“I got a lovely note from a guy… his dad is 96 years old and had put $240,000 into a Volt Bank account a couple of years ago as an inheritance for his grandkids. He opened his account using his phone without any help.” 

“And his father told him how disappointed he was that Volt was so great and that they were closing down, and he’d had to take his money back.” 

Rewind three years to January 2019 and North Sydney-based Volt Bank had become the first Australian startup to get a banking licence, following a rethink of the rules under the Morrison government prior to the damning findings of the 2018 Hayne Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.  

Steve and his team were determined not to squander an opportunity to offer Australians a better and fairer banking experience, building what the AFR described as “arguably the best mortgage lending platform in the industry”. Remarkably, Volt Bank’s innovative technology could issue mortgages in just 15 minutes as opposed to several days with most lenders. 

Organisationally, Volt remained in the pilot phase and never opened its deposit book to the public, but the neobank did forge tough-to-secure industry partnerships with big names like PayPal, Cotton On and AFG.  

There was a lot at stake, Steve remembers, in building something that could compete against established lenders like the powerful big four, but with prior positions at NAB, St George and more recently Barclays on his resume, Weston felt ready to give it a go.  

Since arriving back in Australia in 2016, Steve had been vocal about the negative behaviours and systems he witnessed in the UK being repeated here in Australia. In 2017 at a Banking and Finance Oath conference, he implored the audience to consider necessary changes to ward off mistakes that were being made here that he had seen in the UK including lack of transparency, fairness and poor customer practice. 

Not only did Steve seek to rethink banking, but he also sought to provide staff with an innovative and embracing environment where they could live and work within the values that Volt was offering to new customers.  

“We made it fun like many fintechs, we did yoga and meditation, we had beers and the like,” he recalls.   

“But more importantly, we were also about changing the world and doing things in a different and better way … there were great people on the team – not just technically smart, but good people who would walk over broken glass to make a real difference to society.” 

“Our ambition and values were genuine, they weren’t just words on the wall. Our customers, business partners, shareholders, staff and even regulators could see and feel the different approach we were taking.” 

Whilst Volt Bank had raised over $200m, to scale up it needed to raise significantly larger sums.  

Turbulent market conditions – including the post pandemic economic downturn, Ukraine invasion and climbing interest rates the world over – and the 20% cap on single shareholders in Australian banks saw scores of large potential investors steer clear of investing in the Aussie neobank. Steve says they looked everywhere for capital, leaving “no stone unturned”. 

Unable to raise the capital it needed, and the board voted to fold the bank on June 29th.  

Steve says a fold is about so much more than a shortfall of capital, in banking or beyond – it’s about making the tough decision after weighing up ethical considerations. He hopes that other challenger banks will get an opportunity to bring the sort of change to the Australian banking market that the public is so keen to see. He says that is not just about offering fairer pricing and better service levels, it’s about bringing improved ethics to banking.    

“When we talk about ethics, it’s not just about the issues highlighted in the Royal Commission like breaching regulations and charging dead people,” Steve says.

“It’s about not telling customers that you are going to put their interests at the heart of everything you do and then pricing products that only favour new customers. Banks can price products as they see fit but they should be far more transparent when the interest rates are not as good for loyal customers; the same ones that are supposedly being put at the centre of banks post-Royal Commission more ethical approach.” 

Steve says he was comforted by the fact that almost all 140 staff at Volt went on to be snapped up by finance and tech titans ANZ, Commonwealth Bank, Xero, and Atlassian, and often with higher salaries too, he adds.  

“We had more than 100 companies approach us, saying ‘we’re happy to take your staff’, including big banks, small banks, tech companies, retailers – many did pitches to the staff,” he remembers. 

“And as it turned out, we didn’t only help our staff polish up their CVs and fine tune their interview skills, we also helped staff articulate the value they would offer to new employers.” 

It’s this empathetic duty of care from Volt’s management that set the neobank apart – and Steve hopes that despite Volt not being able to continue under its own steam, that its impact will bring a positive impact to society.  

“We spoke with our staff about taking their learnings from Volt about doing the right thing, to their new employers. It means Volt will have a positive rippling influence on a variety of industries, about how you should work – the culture, the ethics, and the integrity.”

The pain and shame of failure is often sought out by venture capitalists and business leaders in the US. It is viewed positively and seen as an opportunity for learning. Steve himself remains as determined as ever in the wake of Volt Bank’s collapse to shake up an industry mired by a reputation of misconduct and this time; he comes armed with the potent learnings of a failure done ethically. Whether that is embraced in Australia is yet to be seen. 

“We were, in some ways, a poster child in terms of ethics, governance, compliance, openness … And like I said, the feedback from people was overwhelmingly positive, but we just couldn’t raise the capital we needed,” he says.  

“I still have a fire in my belly to do right by society and it’s now burning more than ever because I’ve got to redeem myself and I’ve learned so much.”  

And what of Volt’s industry-first 15-minute mortgage technology? Steve says, a sales process is underway. He’s hoping the technology can find a home and deliver improved outcomes for customers, something he admits will be an “interesting feeling” after the rise and fall of Volt Bank. 

“On the one hand, that would be a kind of validation of what Volt’s tech was going to deliver, and on the other hand, it’ll be: ‘Why the hell couldn’t we raise the capital and have done it ourselves?’”