Leading through crisis: How Volt’s Steve Weston kept the neobank alive through the rollercoaster of COVID-19

Steve Weston is co-founder and chief executive of Volt, one of the pioneers of the once-buzzing Australian neobank scene.

He’s held senior positions at global institutions, started a tech-enabled bank from scratch, and navigated a global pandemic and economic crisis.

Along the way, he’s learnt a thing or two about what makes good leadership — and bad.

Having grown up in North Queensland, Weston admits he fell into finance after a week’s work experience in a bank — taken “because it was air conditioned”.

But his career took him to the UK, where he ended up as chief executive of the mortgage business at Barclays, one of the largest and oldest banks in the world. When he came back to Australia in 2016, he saw opportunity.

Weston can even pinpoint the moment Volt was born. On budget night, 2017 — the only budget speech he had ever watched live — then Treasurer Scott Morrison announced new measures that would allow for more banking competition.

“I still get the hairs on the back of my neck standing up thinking about it,” Weston tells SmartCompany Plus.

He knew what was coming next. And if he didn’t do it, who would?

Weston didn’t sleep that night, but filled out a notebook with a “crude business plan”. Within 48 hours, he and co-founder Luke Bunbury were working on a feasibility study.

Fast forward to July 2019, and the startup became the first Aussie neobank to secure its authorised deposit-taking institution (ADI) licence, followed by Judo Bank, 86 400 and Xinja.

In January 2020, it celebrated a $70 million capital raise amid talks of an IPO.

Volt’s competitors were raising millions too. The neobank sector was on the up-and-up, or so it seemed.

Then COVID-19 came along, and the environment was no longer one of innovation and growth, but one of pivots, pauses and disappointment.

Xinja announced in late 2020 that it would no longer be operating as a bank. And in January 2021, NAB announced plans to acquire 86 400.

That left just two fully independent neobanks in the Aussie scene: SME-focused Judo Bank and Volt.

COVID-19 has changed the sector in Australia and globally, Weston says.

“If we went back 18 months, the focus of global investors in neobanks was to get as many customers as you can … and work out how you make money later,” he says.

“That has certainly changed.”

Volt reduced its spending and its costs, pulled the plug on a $50 million capital raise, and pivoted to focus on its mortgage product and Banking-as-a-Service capabilities, rather than launching with personal lending.

For Weston, it’s been a test of leadership. How do you keep your team engaged and optimistic when things are looking grim; when you’re having to cut hours and work remotely, and when your whole industry is in turmoil?

SmartCompany sat down with the founder to find out how his leadership style has changed over the years, and what he learnt from the corporate world that helped him — and his team — through the COVID-19 crisis.

Four takeaways:

1. No matter how complex or tech-enabled your business is, success is dependent on people: customers, shareholders, regulators and (most importantly) staff. Their happiness is a measure of success;

2. People have great bullshit detectors. Be open and honest, and they will feel respected;

3. Not everyone thinks or acts in the same way. Good leadership is tailored to the individual; and

4. However hard you think building a startup will be, prepare for it to be even harder.

Has your leadership style changed since moving from corporate banking to a startup?

I had always heard the chief executive officer role was the loneliest on earth.

Previously, I’ve been CEO of large parts of global banks, but there you always have the infrastructure around you. I wasn’t waking up at 3am and working through problems that are hard to share with others.

I’ve certainly spent more time doing that as a founder CEO than I ever have in the past.

But my leadership style was always a little different, I think. Even in my former banking life I was perhaps more interested in people than most.

I try to get to know all the staff, learn a bit about them and their families, and always say ‘good morning’ or ‘good afternoon’.

My hypothesis is that any business’ success is largely dependent on people — customers, shareholders, regulators — but particularly staff.

The more you can build a culture and an environment where staff can do their best every day, the better off you will be.

People think running a neobank has to be all about the technology. That’s important. But first and foremost it’s about attracting the best talent.

I work very, very hard on the ‘people’ side of the business. It’s been a little more difficult during COVID, but that focus has become more important than ever.

Steve Weston and the Volt team. Source: supplied.

How do you keep that focus on people running through a business?

When I worked at Barclays, we had 3,000-plus staff in my department and 25 in the management committee.

Each of those 25 managers had to spend one day a month out in the ‘real world’ — getting out of the ivory tower and sitting on phone calls with the collections or customer services departments, or working in branches.

At first, that was a big ask of the team because most of them hadn’t worked in a branch or in a call centre environment. But after two or three years of continual focus, I started seeing the decisions the executive committee was making were more attuned to customers and staff than they would ever have been.

You’d have the brightest people sitting around a table. They never wanted to be embarrassed by saying they didn’t really understand what was going on in the vast majority of our customers’ lives.

Sitting on a telephone call, talking to people with complaints and who are doing it tough, it changes your mindset.

Regularly, we would have executives recounting real life situations and asking: ‘Is this initiative we’re asking for funding for going to solve the problem?’

At that stage, I almost wanted to break down and cry because I knew I was getting there.

The past 18 months or so have been difficult for all businesses, including the neobanks. How do you keep staff motivated during tough times?

It’s amazing how understanding people are, and how good their bullshit detectors are.

When we had to move to working from home at the beginning of April last year, we did two one-hour all-hands sessions per week.

I would go through the good, the bad and the ugly — spending more time focused on the bad and the ugly — while taking any questions, explaining where we were at and, if we had to pivot, why.

There was a lot of work in terms of communicating with people, not to reassure them; it was far from that. But being realistic.

In terms of making very difficult decisions, around people in particular and reducing hours, that just tears your heart out.

In some ways, clinically, those decisions were easy. We had to reduce costs.

But never did I lose the human factor. People are smart; they understand.

If you explain all the reasons behind the decisions, people are not going to be clicking their heels and delighted, but they’ll feel respected and appreciated.

What do you consider to be your main indicators for success?

There are some pretty clear milestones around product delivery, number of customers, number of partners on board, financial metrics compared to plan, compliance breaches.

All of those things are clear.

For me, though, it actually comes down to people. Are your customers happy? Are your shareholders happy?

And particularly, are your staff happy? Do they feel like they’re being given an opportunity to grow and to be heard and to do their best everyday?

That’s probably the lead indicator. If you have a happy team, there is a direct correlation regarding happy customers, and a direct correlation with happy shareholders.

Get the team doing their best — that’s why you’ve brought them on. And that doesn’t happen by itself, that’s 90% of the role, and it requires so much hard work.

What’s the best piece of advice you’ve ever received?

I got a real wake up call from one of my staff members, who was in a senior role, in the early 2000s.

She would come to me quite regularly with problems and I would solve those problems. I would be on the phone to people who I thought would help her out, and they usually did.

She would leave, and I would think: ‘fantastic, I’ve done a great job’.

One day not too far into our working relationship, she came to me and said: ‘If you keep solving my problems like you are, I’m going to stop telling you about them’.

She had the answers herself, and was just coming to bounce them off me, but never got a chance. Before she got half way through, I was always already on the phone.

I wanted to cry. I thought that I was doing the right thing. I thought I was genuinely helping — I meant well.

From that moment on, I started to learn about leadership. People are very different, they will need different things.

Now, everyone in my senior team has their personality profiles done, and we share them so we understand what makes people tick.

Some people feel suffocated if you catch up twice a week. Some prefer to talk every day.

How are they going to act under pressure? How am I going to act? How are we going to get on? Tailoring your leadership really does make a difference.

Understanding those sorts of things is really, really important. Don’t think that everyone acts the same way that you do. They don’t.

If you could go back in time and offer some advice to the Steve of May 9, 2017, what would you say?

I would tell myself: You are going to need to think very, very differently.

I knew getting a banking licence would be difficult, and it was extremely difficult. I also knew the most difficult thing would be to run the bank, and we’re just starting that now.

What I underestimated was the difficulty in building a bank with the new technology that will support the next evolution of banking business models in a regulated environment.

Working with a number of technology partners to make that happen has been tough. Just because they’re global doesn’t mean they will be able to provide everything you need.

It’s also very hard to find someone with the skill set of building a bank. They don’t exist.

You’re kind of refactoring people from different industries, or relying on people like myself who may have been in executive roles in banks.

That’s probably been the biggest learning. But I’m not sure we could have been much better prepared.

I would tell other founders to hope for the best and prepare for the worst. That building phase is difficult.

And if you’re a technologist, you may be able to get the building part done. Then running it is difficult.

You’re going to have staff, you’re going to have customers, you’re going to need to make profit, you’re going to need to raise capital.

It’s all about resilience and adaptability.

If you need to be pretty certain what you’re going to do each and every day, a startup is probably not for you.