However, the body said it would continue to "closely scrutinise" acquisitions by major banks
The Australian Competition & Consumer Commission will not oppose National Australia Bank’s proposed acquisition of neobank 86 400, the regulator has announced.
86 400, launched in 2019, is a digital-only bank that delivers services through a smartphone app. In January, NAB announced plans to acquire the bank for $220 million.
“Innovative fintechs play an increasingly critical role in the market, challenging the established banks, leading to more innovative and cheaper banking for consumers,” ACCC Chair Rod Sims said. “We therefore examined the proposed acquisition particularly closely, including extensive consultation with industry participants, given the important role of that innovation.”
The ACCC’s consultation included banks, non-bank lenders, mortgage brokers, fintechs, and industry and consumer bodies. The ACCC said that most interested parties “raised no or limited concerns with the transaction.”
“Market feedback suggested that while 86 400 is innovative, particularly in reducing the time and effort in completing home loan applications, there are a number of other businesses with similar offerings or the ability to replicate them. These other competitors continue to bring a similar disruptive influence to the market,” Sims said. “Supporting our decision is that we have seen several banks and non-bank lenders outside the big four invest heavily in their technology and service offering to improve user experience.”
Sims said that the ACCC felt the acquisition was “unlikely to substantially lessen competition in the market,” but the body would continue to “closely scrutinise” acquisitions, particularly by major banks.
“The ACCC’s home loan price inquiry reports of 2018 and 2020 show competition between the big four banks has been muted at best,” Sims said. “They tend to accommodate each other rather than competing strongly to win market share. Therefore, any acquisition of a rival or potential rival of any of the big four needs to be very closely considered.”