Australian Digital Lender in1bank Shuts Down, Customers Urged to Move Funds

January 27, 2026 • FinTech News
Australian Digital Lender in1bank Shuts Down, Customers Urged to Move Funds

in1bank, a small Australian digital lender that had sought to establish itself as a challenger retail bank, has announced that it will cease its banking operations, return customer deposits and hand back its banking licence as it winds down its business.

The closure marks the end of one of the most recently authorised digital banks in Australia and reflects the challenges faced by smaller neobanks in a competitive market dominated by major incumbents. Customers are being urged to transfer their funds to other institutions before the bank’s services are fully decommissioned in early February 2026.

What in1bank Announced

In a statement posted on its website, in1bank said it has decided to discontinue its banking business and will return all customer deposits, effectively ending its operations as a bank in Australia. The digital banking mobile app is scheduled to stop functioning at 5 pm AEDT on 5 February 2026.

As part of the closure process:

Customers must confirm and provide accurate alternative bank account details to ensure seamless transfer of their funds.

The bank will initiate transfers of remaining balances to nominated accounts between 23 January and 5 February 2026.

Once deposits are returned, in1bank will hand back its Authorised Deposit-taking Institution (ADI) licence to the Australian Prudential Regulation Authority (APRA).

The bank has reassured depositors that their funds are “completely safe” and covered by Australia’s government-run Financial Claims Scheme, which protects eligible deposits up to a maximum of AUD 250,000 per account holder should it ever be required.

Timeline and Customer Action Required

According to the bank’s public guidance and community reporting:

The return of deposits (“ROD”) period runs from 23 January to 5 February 2026, during which in1bank will transfer money to confirmed external accounts.

All in1bank accounts will close once the transfers are complete and the app is decommissioned.

Customers who fail to confirm alternative account details risk delays or loss of access to their funds after the app shuts down.

Loan customers are being contacted separately with information about future repayment arrangements, while those with linked offset accounts are able to transfer balances to their loans or external accounts prior to closure.

Background on in1bank

in1bank was founded in 2019 with a vision to be a digital-first bank tailored to Australians from diverse backgrounds — particularly the Chinese-speaking community — and was notable for its bilingual platform.

After initially operating with a restricted banking licence, it obtained a full banking licence from APRA in May 2023 and began offering deposit and lending products.

Despite this regulatory approval and earlier plans for growth, the bank ultimately decided to exit the market as operational pressures and competitive dynamics intensified. Experts in the industry have noted that in1bank’s limited scale of lending and small deposit base made sustaining a standalone bank increasingly difficult.

Industry Context: Digital Banking in Australia

Australia’s digital banking sector has seen several challenger banks launch — and later exit — in recent years. Notable previous closures include Xinja Bank, 86 400, Volt Bank, and International Bank of Australia. Many of these exits occurred despite strong initial customer interest, illustrating the challenges neobanks face in building sustainable revenue models amid competition and regulatory requirements.

Licensed digital banks in Australia are regulated under the Banking Act 1959 and supervised by APRA. The Financial Claims Scheme then provides a layer of depositor protection for consumers who hold funds with any authorised ADI.

Why in1bank Is Shutting Down

The bank did not disclose detailed reasons for its closure beyond the voluntary decision to discontinue operations. However, independent commentary from analysts suggests that:

in1bank had relatively modest lending activity compared with its deposits, indicating limited growth in its core banking business.

The economics of operating a full ADI — including compliance costs, capital requirements and competitive pressures — may have contributed to the decision to exit.

Customers and industry observers have pointed out that many challenger banks struggle to achieve profitability without significant scale or diversification of products.

Impact on Customers

Customers are being urged to act quickly to ensure a smooth transition:

Ensure their alternative bank account details are up to date in the in1bank app or via communications from the bank.

Cancel or repoint any recurring payments, direct debits or payroll instructions tied to in1bank accounts before services are deactivated.

Transfer outstanding term deposit funds to external accounts, as these will be terminated and credited to transaction accounts before closure.

While the bank is returning funds proactively for most customers, those who do not follow the instructions may face delays or complications.

Deposit Safety and Regulatory Guarantees

Australia’s Financial Claims Scheme (FCS) provides government-backed protection for eligible bank deposits up to AUD 250,000 per account holder should an institution fail or otherwise be unable to meet its obligations. in1bank customers are covered under this scheme as the bank was a fully licensed ADI.

APRA, the prudential regulator, will closely monitor the orderly return of deposits, and in1bank has reiterated its commitment to following regulatory requirements throughout the closure process.

Looking Ahead: The Future of Neobanking in Australia

The departure of in1bank once again highlights the difficulties facing smaller digital banks in Australia, where established big four banks dominate market share and challenger lenders must contend with strict prudential requirements and high customer acquisition costs.

Industry observers say the ongoing trend of neobank exits may prompt regulators and policymakers to consider how to foster a more sustainable competitive landscape without compromising depositor safety.

For consumers, the closure serves as a reminder to regularly review banking relationships and ensure they understand how deposit protections work under the Financial Claims Scheme.

Focus Keyphrase (2–3 words)

in1bank closure

Excerpt (30+ words)

Australian digital bank in1bank has announced it will shut down, return customer deposits, and hand back its banking licence, with accounts set to close and funds transferred to alternate accounts by early February 2026.

Image Description

Photo of a smartphone showing the in1bank mobile banking app with a prominent “Account Closing” notice overlay, representing the digital bank’s shutdown in Australia.

Hashtags

#in1bank #DigitalBanking #BankClosure #Fintech #AustralianBanking #Neobank #FinancialClaimsScheme #TheFinRate

LinkedIn Post 1 (Industry & Regulation)

Australian digital bank in1bank is shutting down, discontinuing its banking business and returning customer deposits before handing back its authorised banking licence. Customers are being urged to confirm alternative account details and transfer funds by early February 2026, as the bank decommissions its services. The move highlights ongoing challenges for challenger banks in competitive markets.
#in1bank #DigitalBanking #BankClosure #Fintech #AustralianBanking #TheFinRate

LinkedIn Post 2 (Consumer & Safety)

Big banking news in Australia: in1bank is ceasing operations and returning all customer deposits, with funds covered under the government’s Financial Claims Scheme. Customers need to confirm alternate bank account details before the digital bank app is deactivated on 5 February 2026.
#ConsumerProtection #AustralianBanking #in1bank #Fintech #DepositSafety #TheFinRate

Instagram Caption

Australian digital lender in1bank is shutting down, returning customer deposits and handing back its banking licence. Customers should confirm their alternate account details before services end on 5 February 2026.

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in1bank, a small Australian digital lender that had sought to establish itself as a challenger retail bank, has announced that it will cease its banking operations, return customer deposits and hand back its banking licence as it winds down its business.

The closure marks the end of one of the most recently authorised digital banks in Australia and reflects the challenges faced by smaller neobanks in a competitive market dominated by major incumbents. Customers are being urged to transfer their funds to other institutions before the bank’s services are fully decommissioned in early February 2026.

What in1bank Announced

In a statement posted on its website, in1bank said it has decided to discontinue its banking business and will return all customer deposits, effectively ending its operations as a bank in Australia. The digital banking mobile app is scheduled to stop functioning at 5 pm AEDT on 5 February 2026.

As part of the closure process:

Customers must confirm and provide accurate alternative bank account details to ensure seamless transfer of their funds.

The bank will initiate transfers of remaining balances to nominated accounts between 23 January and 5 February 2026.

Once deposits are returned, in1bank will hand back its Authorised Deposit-taking Institution (ADI) licence to the Australian Prudential Regulation Authority (APRA).

The bank has reassured depositors that their funds are “completely safe” and covered by Australia’s government-run Financial Claims Scheme, which protects eligible deposits up to a maximum of AUD 250,000 per account holder should it ever be required.

Timeline and Customer Action Required

According to the bank’s public guidance and community reporting:

  • The return of deposits (“ROD”) period runs from 23 January to 5 February 2026, during which in1bank will transfer money to confirmed external accounts.
  • All in1bank accounts will close once the transfers are complete and the app is decommissioned.
  • Customers who fail to confirm alternative account details risk delays or loss of access to their funds after the app shuts down.

Loan customers are being contacted separately with information about future repayment arrangements, while those with linked offset accounts are able to transfer balances to their loans or external accounts prior to closure.

Background on in1bank

in1bank was founded in 2019 with a vision to be a digital-first bank tailored to Australians from diverse backgrounds — particularly the Chinese-speaking community — and was notable for its bilingual platform.

After initially operating with a restricted banking licence, it obtained a full banking licence from APRA in May 2023 and began offering deposit and lending products.

Despite this regulatory approval and earlier plans for growth, the bank ultimately decided to exit the market as operational pressures and competitive dynamics intensified. Experts in the industry have noted that in1bank’s limited scale of lending and small deposit base made sustaining a standalone bank increasingly difficult.

Industry Context: Digital Banking in Australia

Australia’s digital banking sector has seen several challenger banks launch — and later exit — in recent years. Notable previous closures include Xinja Bank, 86 400, Volt Bank, and International Bank of Australia. Many of these exits occurred despite strong initial customer interest, illustrating the challenges neobanks face in building sustainable revenue models amid competition and regulatory requirements.

Licensed digital banks in Australia are regulated under the Banking Act 1959 and supervised by APRA. The Financial Claims Scheme then provides a layer of depositor protection for consumers who hold funds with any authorised ADI.

Why in1bank Is Shutting Down

The bank did not disclose detailed reasons for its closure beyond the voluntary decision to discontinue operations. However, independent commentary from analysts suggests that:

  • in1bank had relatively modest lending activity compared with its deposits, indicating limited growth in its core banking business.
  • The economics of operating a full ADI — including compliance costs, capital requirements and competitive pressures — may have contributed to the decision to exit.
  • Customers and industry observers have pointed out that many challenger banks struggle to achieve profitability without significant scale or diversification of products.

Impact on Customers

Customers are being urged to act quickly to ensure a smooth transition:

  • Ensure their alternative bank account details are up to date in the in1bank app or via communications from the bank.
  • Cancel or repoint any recurring payments, direct debits or payroll instructions tied to in1bank accounts before services are deactivated.
  • Transfer outstanding term deposit funds to external accounts, as these will be terminated and credited to transaction accounts before closure.

While the bank is returning funds proactively for most customers, those who do not follow the instructions may face delays or complications.

Deposit Safety and Regulatory Guarantees

Australia’s Financial Claims Scheme (FCS) provides government-backed protection for eligible bank deposits up to AUD 250,000 per account holder should an institution fail or otherwise be unable to meet its obligations. in1bank customers are covered under this scheme as the bank was a fully licensed ADI.

APRA, the prudential regulator, will closely monitor the orderly return of deposits, and in1bank has reiterated its commitment to following regulatory requirements throughout the closure process.

Looking Ahead: The Future of Neobanking in Australia

The departure of in1bank once again highlights the difficulties facing smaller digital banks in Australia, where established big four banks dominate market share and challenger lenders must contend with strict prudential requirements and high customer acquisition costs.

Industry observers say the ongoing trend of neobank exits may prompt regulators and policymakers to consider how to foster a more sustainable competitive landscape without compromising depositor safety.

For consumers, the closure serves as a reminder to regularly review banking relationships and ensure they understand how deposit protections work under the Financial Claims Scheme.