A new share trading app is targeting Australians as young as 22, helping them buy into US-listed companies.
The Goodments by Douugh app promises commission-free fractional trading in US securities and ETFs, making money through foreign exchange fees rather than charging a commission to its 13,000 customers.
"You could buy one dollar's worth of Apple or Amazon, it means there is no barrier to entry," Douugh founder and CEO Andy Taylor told AAP.
Mr Taylor said the app was designed for customers who feel they have been locked out of the housing market and want to invest in shares instead.
"For many Australians, particularly in Sydney and Melbourne, it's just perceived as out of reach, it's a real generational shift," Mr Taylor said.
"What they want is a quality experience which banks are not giving them."
But Professor Steve Worthington from Swinburne University told AAP on first glance the Douugh business model may not work.
"I'd have to say I don't think that's going to be sustainable ... I don't think that is a business model, relying on forex fees," he said.
Neobanks have a mixed record in Australia so far, with the collapse of Xinja, and NAB buying 86 400, while competitor Volt enters the fiercely contested mortgage market.
Mr Taylor insists Douugh is not a neobank at all but rather a fintech, operating without a banking licence through its backing from Regional Australia Bank.
The company intends to offer card services and launch a Douugh banking app in the near future, while it plans to convert the just-launched Goodments app into a new platform called Wealth Jar.
"We are a capital lite software business, we are monetising the software," he said.
Prof Worthington said it remains to be seen whether younger customers will stick with app-based share investing once they have a taste of its volatility.
He cited the US example of trading app Robinhood, which facilitated a massive pile into Gamestop stocks, but many people ended up losing money.
"There will be a decline and when the stocks drop off that is when you get found out," he said.
"A rising tide lifts all boats but when the tide goes out some boats will sink like submarines."
Mr Taylor said the app is not a platform for day trading despite its fee structure, and said the company is trying to be responsible by encouraging people to invest and hold for the long term.
The app offers access to more than 4000 stocks but it does not facilitate investment in companies that are directly involved in oil, tobacco, fur or military and weapons products.
He maintained a low interest rate environment will work in favour of Douugh, when investors realise they are not making money through traditional bank deposits.
Australian Associated Press