Shane Marsh: Dosh co-founder on the company's bid to become New Zealand's first digital-only bank

Award-winning finance app Dosh has launched a bid to become New Zealand's first locally-owned digital-only bank.

The company has initiated an application to become a registered bank in New Zealand, with the goal of reducing costs for customers by cutting out physical branches.

Dosh co-founder Shane Marsh says more and more users have switched over to using digital-only banking.

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Episode Transcript

Speaker 1 (00:00):
New Zealand company Dosh is trying to become the first
New Zealand digital only bank. Dosh has started the application
process to become a registered bank in New Zealand in
the hope that it will increase banking competition. Shane marsh
is Dosh's co founder and chief executive and with us now, Hey, Shane, hy, So,
if you're digital only, what was that?

Speaker 2 (00:18):
Thanks for having me, alas, You're more than welcome.

Speaker 1 (00:20):
If you're digital only, does that mean you've got no
ATMs where I can take money out? You've got no
bank branches? Nothing like that.

Speaker 2 (00:27):
Yeah, traditional bank has branches. You'll feed them along all
the high streets of the New Zealand cities and towns.
And these branches cost a lot of money to rent,
to maintain and to staff as well. So with the
prices that are set by a normal banking organization, they
need to cover all of these costs. A digital bank
doesn't have those branches as much lower number of staff

(00:51):
and therefore the price is in value to consume. It's
as much better.

Speaker 1 (00:55):
Do I have the option of withdrawing cash from my
bank account though?

Speaker 2 (01:00):
Yeah? Absolutely, you can remove it from your bank account
through just normal internet banking or mobile banking as people
do today.

Speaker 1 (01:08):
What about what no bank card? I can't go get
twenty bucks for I don't know Lolly's.

Speaker 2 (01:15):
In terms of cash, Yeah, well we find most people
are not operating with cash today and most people are
using a card or a digital card to make their payments.

Speaker 1 (01:24):
I noticed that you guys say you'd become the first
New Zealand owned digital only bank. Are there others who
are not New Zealand owned who are already doing this?

Speaker 2 (01:33):
The Rabo Direct, who's a Netherlands bank, And previously you
may recall Bank Direct which was owned by Australian based ASB,
which was amalgamated into ASB some four or five years ago.
So since those banks were created, there's been a lot
changed from a technology perspective. From what we've seen in

(01:55):
the last five to ten years across the world is
the emergence of mobile based digital banks offering the latest technology,
news services and better value for consumers and have been
wildly popular. In the UK, for example, two and every
three people have a digital only bank accounts.

Speaker 1 (02:15):
What are the hurdles that you have got to overcome
in order to be cleared for this?

Speaker 2 (02:21):
Yeah, so we'll be working with the Reserve Bank on
our application, and they look at a number of factors
such as our compliance and security, and also our systems
and the amount of capital, which is a cash that
we have set aside if if things don't go well.
We have our fund held in a bank today and

(02:43):
so those funds are secure and we're also compliant in
the same way the bankers. So we feel confident we
can get most of our quirements that there'll be a
few that will work with on the reserve With.

Speaker 1 (02:55):
The Reserve Bank, how many millions do you have to hold.

Speaker 2 (03:00):
To become a redgis spank In New Zealand you actually
have to hold thirty million dollars of capital, which is
a lot, particularly compared with other countries such as Australia
at fifteen million dollars the capital, or perhaps the UK
where it's only million pounds of capital. But what we're
finding in the market at the moment is that both
the Commerce Commission and the Reserve Bank and the government

(03:22):
are looking for greater competition in the banking market and
they're looking again at some of these rules in terms
of how can we better and hard competition Players like
Dosh into the market so we can offer new services.

Speaker 1 (03:35):
So ultimately, shape are you are you hoping to have
that threshold cleared, like for them to drop it down
from thirty mil in order for you to be able
to get in or are you going to scrape together
thirty mil.

Speaker 2 (03:47):
Yeah, Well, we're confident that we can meet the requirements
that the bank were said and we were forward to
working with them on that. So yeah, Look, it's an
interesting it's an interesting topic about the capital, but ultimately
for us, it's more about how can we do better
consumers and bosfer them better value in pricing.

Speaker 1 (04:03):
Yeah, good stuff, Best of lucky that Shane. Thanks for
talking us through at Shane marsh, the co founder and
the chief executive of Dosh.

Speaker 2 (04:09):
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