MGMT20143 - Business Model Deconstruction: Volt Bank Analysis Report

This report provides an executive summary and detailed analysis of Volt Bank's business model. It begins with an introduction to Volt Bank, a neobank operating in Australia, and its use of a cloud-based platform. The report then breaks down the business model using the Business Model Canvas, examining customer segments, key partners, value propositions, key activities, channels, revenue streams, cost structures, key resources, and customer relationships. It explores the interrelationships between these building blocks, identifies critical success factors, and discusses downside risks. The report also suggests potential business model changes and concludes with recommendations, such as the use of cryptocurrency and potential mergers. The analysis highlights Volt Bank's strengths in digital banking and its competitive advantages, while also acknowledging challenges related to security, capital, and competition with traditional banks. The report is well-structured and uses references to support the analysis.

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Executive Summary
This report provides brief description on Volt bank which is the first to operate fully as a
digital bank with deposit and transaction features. The company uses a cloud based
platform based on Temenos T24 core banking along with Salesforce, Microsoft Azure
and Financial Crime Mitigation and Analytics. The analysis of the business canvas
model had shown that the company has a promising future if they are able to manage
the security issues and product portfolio when compared to the traditional banking
organisations.

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Table of Contents
I. Introduction.....................................................................................................................4
II. Business model.............................................................................................................4
A. Building blocks...........................................................................................................4
1. Customer segments...............................................................................................4
2. Key partners...........................................................................................................4
3. Value proposition....................................................................................................4
4. Key activities...........................................................................................................4
5. Channels................................................................................................................5
6. Revenue Streams...................................................................................................5
7. Cost structure.........................................................................................................5
8. Key Resources.......................................................................................................5
9. Customer Relationships.........................................................................................5
B. Interrelationships.......................................................................................................5
C. Critical Success factors.............................................................................................6
D. Downside risks..........................................................................................................6
E. Business model changes...........................................................................................6
III. Conclusion....................................................................................................................6
IV. Recommendations.......................................................................................................7
References.........................................................................................................................8
Appendix 1 (Business Canvas Model)..............................................................................9

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I. Introduction
Volt bank is one of the neobanks in Australia and are the first bank to have
gained the full banking license among all the challengers. The company has its
headquarters in Sydney and have been found in the year of 2018. The authorization to
operate as a full banking and deposit taking institutions was issues in January, 2019
(voltbank.com.au, 2020). The company uses a cloud based platform based on Temenos
T24 core banking along with Salesforce, Microsoft Azure and Financial Crime Mitigation
and Analytics. The company has also published Volt Lab applications and mobile
applications for gathering feedback from the consumers through feedback on the
services and products offered by the bank. The main aim of the company has been to
change the way people operated in the banking industry (voltbank.com.au, 2020).
Therefore, the company aimed for complete transparency and experience for the
consumers.
II. Business model
A. Building blocks
1. Customer segments
The Volt bank has been targeting mainly the millennial generation in Australia
consisting of young corporate officials, budding entrepreneurs, freelancers and self-
employed people (voltbank.com.au, 2020). Online banking is quite convenient for these
consumers and prefer using digital banking than traditional banking. A research
conducted by Mozo shows that 75% of the Australians use computer or a smartphone
for banking services (Watson, 2020). When dividing the demography in different age
groups, it was seen that 43% of the consumers in the age group of 18-24 years used
online banking, 40% of the consumers in the age group 25-34 years used online
banking, 46% in age group of 35-44 years, 49% in the age group of 45-54 years, 64% in
the age group of 55-64 years and 67% in the age group of 65 and above (Watson,
2020).
2. Key partners
The key partners of Volt Bank includes Fintech, Frollo, Verrency, PayPal,
Collection House and Temenos (australianfintech.com.au, 2020; thepower50.com,
2020; PALMER-DERRIEN, 2019). These partners includes the software and platform
management companies along with investors. Some of these companies are
transaction partners such as PayPal and Verrency as payment service providers.
3. Value proposition
The Value proposition of the company is to offer banking experience and
convenience for the younger generation, low banking fee, highly secured banking and
full transparency (voltbank.com.au, 2020).

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4. Key activities
The company wishes to offer full-fledged banking services, product services and
24 hours customer support (voltbank.com.au, 2020). The company offers high speed
digital services by offering the latest technological platform.
5. Channels
The company is a fully digital banking organisation offering banking service
where complete digital networks are being used. The partner channels offer platform
support on the cloud along with transaction software (temenos.com, 2018). Social
media is another channel used by the company to gather new consumers and perform
banking services.
6. Revenue Streams
The revenue streams of the company is generated from online banking services
and product sales which is similar to the revenue streams of any traditional banking
structure (voltbank.com.au, 2020).
7. Cost structure
The cost structure includes factors such as technology and platform
development, marketing, customer service, administration, licensing, compliance and
regulations. The overall service of the organisation is totally dependent on technology
and platform development (finextra.com, 2019). The company has started up and have
turned into a full-fledged business so licensing, compliance and regulations also add up
to the cost incurred by the organisation.
8. Key Resources
The key resources include platform, brand and partnership, strong and unique brand
catering to youth, scalability of products in many verticals, partnership with companies
providing opportunity to expand at a faster rate and API platform. The brand has good
image in the market along with the partners providing funding and software support. The
new technological product improves the scalability of the products and transactions
resulting in agility and security of the banking model (temenos.com, 2018). Moreover,
the model has a pre country specific function which facilitated in fully operate as an
online banking organisation (temenos.com, 2018).
9. Customer Relationships
The customer relationships include digital banking, online service to the
consumers, mobile services, social media channels and cloud environment. The
company is a digital bank uses online platform along with mobile banking applications
and other applications for engaging with the consumers (voltbank.com.au, 2020).
B. Interrelationships
There is significant interrelationship between all the building blocks as all these
blocks are necessary for successfully operating the business. The key investors are
responsible for providing funding and generating new funds from partners to improve
the scale of operation (Berry, 2019). On the other hand, other partners such as the
technology and software operating companies are supporting volt to develop a digital

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banking website with high quality security along with the development of new
applications on the smartphone devices for improving the quality of engagement. It
defines the value proposition of the company that has been trying to develop a highly
transparent operation focused on providing convenience to the consumers.
The key resources of the company depict the use of resources to develop better
service and product opportunities for modern consumers allowing utmost convenience.
In order to maintain effective customer relationship, the key partners and cloud handling
organisations has developed effective platforms.
C. Critical Success factors
The key success factor for Volt bank includes innovation and transformation of
banking operations. It is essential to make sure that Volt is not only offering digital first
but mobile first to their consumers. The quality of experience on mobile banking has to
be totally exclusive and differentiated to traditional banking applications.
The second critical success factor is flexibility of the banking devices and
systems which should focus on continuous evolution of the system using agile
technology including autonomy to the third party providers. The third success factor is
offering low and zero fees for services which provides competitive to the company in
respect to other companies in the market. The final success factor is use of crypto
currency to attract new consumers and democratized the process of crypto trading.
D. Downside risks
Even though Neo banks have been revolutionary in changing the banking
industry, there are various drawbacks of Volt which affects their business and are risk
factors. Volt offers minimum services when compared to the traditional banking
organisations which is not due to the regulatory problems but due to the lack of capital.
Consumers does not trust online banking and even though traditional services does not
offer optimal experiences to the users but service portfolio is safer. The problem of
cyber security in digital banking along with protection of personal data is a great risk for
the consumers. Volt is just starting out and they need to expand by providing security
and quality services to the consumers to increase their market share but it is quite for
them to match up to the infrastructure of traditional banks.
E. Business model changes
There are significant changes to the business model which can be made to
improve it further such as the use of security based services and encrypted data to
improve the chance of cybercrimes. Volt bank should merge with major neo banks
already established in Europe to expand and learn from the first movers in the industry.
The company should launch new products and services at regular intervals to match up
to the services offered by the traditional organisations. The company should also target
consumers in emerging economies due to the penetration of technology and internet
banking to various parts of the world. The use of crypto currency to attract new
consumers and democratized the process of crypto trading is another change which
would provide upper hand to the company.

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III. Conclusion
The analysis of the business canvas model shows that the prospect of Volt
succeeding in the current banking industry is high as the majority of the consumers in
Australia are used to mobile and net banking facilities. Moreover, the business model
also shows that the key partners have been able to raise funds to expand the business
at large scale to match up to the traditional big four in Australia. Moreover, the
scalability and agility of the banking services in digital platform is far superior to any
normal banking applications which provides significant competitive advantage to the
company.
IV. Recommendations
Therefore, based on the analysis of the business model following recommendations
have been proposed:
 The use of crypto currency to attract new consumers and democratized the
process of crypto trading is necessary to gain competitive advantage. The
consumers are interested in crypto currency but none of the traditional banks
consider it as legit trading currency.
 Volt should merge with other Neo banks such as Xinja so that they can use both
their capital funding to match up to the scale of operation of any big four
traditional bank in Australia.

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References
australianfintech.com.au. (2020). Volt partners with Frollo to create Volt Labs and put
customers first. Australian FinTech. Retrieved 10 April 2020, from
https://australianfintech.com.au/volt-partners-with-frollo-to-create-volt-labs-and-
put-customers-first/.
Berry, P. (2019). Neobanks: How Do Volt & Xinja Plan To Change Banking? | Canstar.
Canstar.com.au. Retrieved 10 April 2020, from
https://www.canstar.com.au/online-banking/neobanks-how-do-volt-xinja-plan-to-
change-banking/.
finextra.com. (2019). Volt Bank contracts with FIS. Finextra Research. Retrieved 10
April 2020, from https://www.finextra.com/newsarticle/34155/volt-bank-contracts-
with-fis.
PALMER-DERRIEN, S. (2019). Volt becomes first neobank to secure full banking
licence — and celebrates a $8.4 million raise - SmartCompany. SmartCompany.
Retrieved 10 April 2020, from
https://www.smartcompany.com.au/startupsmart/news/volt-bank-neobank-full-
banking-licence/.
Rogers, I. (2019). Volt Bank counts on fintech sparkle. Banking Day. Retrieved 10 April
2020, from https://www.bankingday.com/nl06_news_selected.php?
selkey=25744.
temenos.com. (2018). Neobank Volt Bank Record Time Go Live With Temenos Digital
Banking. Temenos. Retrieved 10 April 2020, from
https://www.temenos.com/news/2018/12/19/neobank-volt-bank-record-time-go-
live-with-temenos-digital-banking/.
thepower50.com. (2020). volt bank inks deal with Verrency | The Fintech Power 50. The
Fintech Power 50. Retrieved 10 April 2020, from
https://www.thepower50.com/volt-bank-inks-deal-with-verrency/.
voltbank.com.au. (2020). About Us | Volt Bank. Voltbank.com.au. Retrieved 10 April
2020, from https://www.voltbank.com.au/about/.
Watson, T. (2020). Neobank Report 2020: Digital banking in a new decade.
Mozo.com.au. Retrieved 10 April 2020, from
https://mozo.com.au/neobanks/articles/neobank-2020-report-digital-banking-in-a-
new-decade.

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Appendix 1 (Business Canvas Model)
Key Partners
 Fintech
 Frollo
 Verrency
 PayPal
 Collection
House
Key Activities
 Banking
services
 Product
services
 24 hours
customer
support
Value
Proposition
 Banking
experience
and
convenience
for the
younger
generation
 Low banking
fee
 Highly
secured
banking
Customer
Relationships
 Digital
banking
 Online
service to
the
consumers
 Mobile
services
 Social media
channels
 Cloud
environment
Customer
Segments
 Young
Australian
corporate
workers,
freelancers,
emerging
entrepreneurs
 Targeting
mainly the
millennial and
generation Y
 Self-
employed
and business
accounts
Key Resources
 Platform,
brand and
partnership
 Strong and
unique
brand
catering to
youth
 Scalability of
products in
many
verticals
 Partnership
with
companies
providing
opportunity
to expand at
a faster rate.
 API platform
Channels
 Completely
digital
network
 Partner
channels
 Social media

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Cost Structure
 Technology and platform development
 Marketing
 Customer Service
 Administration
 Licensing
 Compliance and regulations
Revenue Streams
 Banking services and products

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Appendix 2

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