Fintech transforming services across value chain

With tech solutions for both individuals managing their money and businesses seeking capital, the fintech revolution is creating considerable advantages for disruptor firms in the financial space

FINTECH COVERS a vast area, from mobile and digital payments to P2P lending to the blockchain. The legacy financial system is under serious threat from emerging technologies, and there is growing awareness that non-banks and digital banks offer not only an alternative way to manage money and access funds but also a superior way to do these things. “Major finance players are heavily investing in the fintech space to provide innovative solutions, while continuing to cater to their current customer base,” says Andrew Morrison, chief product and growth officer at ubank. Thinking of itself as a money app first and a bank second, ubank brings together smart features, including savings targets and bonus-interest nudges, and a next-generation digital home loan experience.

“This is a plus for newer enterprises, sole traders and partnerships, which typically don’t have the substantial volume of trading data required by traditional lenders.” This makes for a very simple loan application process for brokers, who need only upload six months’ worth of a small business’s bank statements to OnDeck’s secure online portal before a funding decision can be made in as little as one hour. For people using mobile apps, the main advantage is being able to see all their money displayed on one screen, combined with smart features and real-time insights. “Customers can download our app, open an account in just two minutes, and access smart technology to get the most relevant information about their money,” says Morrison. “This has been a major drawcard since we relaunched to market earlier this year.” ubank systems connect more than 160 financial institutions’ accounts on the ubank app. All balances and transactions can be viewed in one place, helping users set up, manage and achieve their money targets. As consumer trust in open banking increases, more people are choosing to share their data. This adds momentum to the initiative, as well as increases the data quality and volume that financial companies riding the fintech wave have available to play with.

living, and we now know that people are thinking about their money every day,” says Morrison. “It’s important for customers to know where their money is being spent, how it’s changing over time, and what bills are expected each month.” As the rate-hiking cycle looks set to continue for now, any insight from fintech tools into extra savings that can be rechannelled to paying off a home loan quickly can translate into less mortgage stress. RFI Global data shows that when it comes to accepting guidance and tools from a financial institution, younger consumers are more open to the idea. They are more willing to hear from their lender when it comes to tips on money management.

Examples of fintech-enabled financial services

“Data and analytics capabilities will continue to grow, and consumers will start to see more relevant insights about how they manage their money, resulting in banks developing new innovative features to match this,” says Morrison. The key element of speed Open banking helps brokers as well, as they are recognised as trusted advisers (TAs) within the system, gaining access to customers’ financial information. This can make a huge difference in speed and accuracy when brokers are processing a loan. For businesses seeking finance, speed is a game changer. Having an application processed quickly can make all the difference to cash flow or being in a position to take advantage of a market opportunity. This holds even if the loan is declined, because a fast ‘no’ allows a business to rectify a problem with an application, or approach a different lender. “Regardless of industry, the common thread is the need for fast lending decisions and accelerated delivery of funds,” says Poolman. “For small businesses, the element of speed can make a significant contribution to profit margins and bottom-line results.” OnDeck research shows that around one in four small to medium-sized businesses applying for a loan at a traditional bank will face an adverse outcome simply because of the time it takes to apply. This is a clear example of how legacy systems have become an albatross around the neck of many SMEs in the current economy. “There is no place for this delay in today’s fast-tracked business environment,” says Poolman.

This is particularly so as the end of the calendar year approaches – typically peak earnings season for many SMEs that rely on strong sales over the next few months to make up for quieter periods. “We’re seeing applications for small business finance across every industry sector, though retail, construction and hospitality are well represented,” Poolman says. Harnessing the insights of tech tools For individuals, the advantages provided by fintech are also in sharp relief in the less certain economic environment of late 2022. “Rising interest rates have created high inflation and high costs of

Since entering the market in 2008 as Australia’s first digital bank, ubank has been helping Australians get the most out of their money. Customers can see their money from over 100 financial institutions in one place – no matter where they have accounts. Thinking of itself as a money app first and a bank second, ubank brings together smart features, including savings targets and bonus interest nudges, with real-time insights and a digital home loan experience designed to help customers get ahead. A part of National Australia Bank, ubank completed a merger with neobank 86 400 in 2022.

Find out more

OnDeck Australia is a leading online lender that focuses on Australia’s small business community. As OnDeck only provides small business loans, it is an expert in an area that has been underserved by the banking sector for too long. Importantly, OnDeck offers a skilled and experienced team, each of whom have been hand-selected for their understanding of the needs of small enterprises.

Find out more

This is as true for features that enable transparency of purchases – bill tracking, spending insights and searchable transactions – as it is for transparency of the individual’s overall financial position, which can be provided by credit-score tracking and financial health monitoring. Fintech tools and accurate information at consumers’ fingertips are likely to play a key role in boosting financial wellbeing, reducing stress around such things as mortgages, and helping people feel in control when it comes to money. Likewise, SMEs are concerned about their financial situation as central bank rate hikes continue. Many are looking for professional assistance to help them ride out the storm.

Edward D. Jones Sr. establishes Edward D. Jones & Co. in 1922, determined his company will treat associates as partners and treat clients fairly by offering appropriate, quality investments. The firm’s office in downtown St. Louis is a single room furnished with a desk, three chairs and a hat rack.

Find out more

“Regardless of industry, the common thread is the need for fast lending decisions and accelerated delivery of funds”

Cameron Poolman, OnDeck

In Partnership with

Tech changing the game Examples of technologies impacting financial transactions include the New Payments Platforms (NPP) and the PayID platform, which give people the ability to process fast bank account transfers. The arrival of protocols such as the application programming interface (API) and open banking has also opened the door for information across different financial institutions’ accounts to be amalgamated into customer banking apps. In the lending space, informational mixes of commercial and consumer credit history plus cash flow are being used to build holistic risk profiles. OnDeck Australia launched the risk-predicting credit model KOALA Score™ in 2021 utilising such insights. “It uses a sophisticated blend of big data, predictive analytics and statistical techniques in combination with data from multiple credit reporting agencies, including illion and Equifax, to support more tailored risk assessment for Australian small business lending,” says Cameron Poolman, chief executive at OnDeck.

OnDeck research shows that six out of 10 small businesses plan to partner with a broker, highlighting opportunities for brokers who expand into small business lending. “When six out of 10 small businesses say they are keen to use a broker, there are exceptional opportunities for brokers,” says Poolman. Thanks to the speed, accuracy and insights provided by advances in fintech, brokers are better placed than in the past to help SMEs quickly. “Brokers can now help their small business clients seize growth opportunities when they arise,” says Poolman.

“The biggest evolution we’ve seen is the move to mobile-led banking through smartphone apps. Customers are using mobiles to do smarter banking and to manage their money while on the go”

Andrew Morrison, ubank

Fintech has changed the individual banking experience drastically in the last few years. “The biggest evolution we’ve seen is the move to mobile-led banking through smartphone apps. Customers are using mobiles to do smarter banking and to manage their money while on the go,” says Morrison.

Industry experts

Christopher Lee

MFAA head credit adviser, Finsure Finance and Insurance

Stewart Saunders

Heritage Bank

Cameron Poolman

OnDeck

Andrew Morrison

ubank

Industry experts

Andrew Morrison is the chief product and growth officer at ubank. Morrison started at ubank in 2020 and since then has worked closely with the team on the integration with 86 400, as well as on digital, design, growth and everyday banking. Prior to joining ubank, Morrison was in a similar role at a CBA-funded fintech. His career spans two decades in financial services, banking and technology, both in Australia and internationally.

ubank

Andrew Morrison

Cameron Poolman has served as OnDeck Australia's CEO since the company's launch to the Australian market in November 2015. Previously, he was founder and CEO at Grays Online, one of Australia's largest e-commerce groups focused on small businesses. He holds a Bachelor of Engineering (Mechanical) degree from the University of Sydney and a Master of Business (Marketing) from the University of Technology, Sydney.

OnDeck

Cameron Poolman

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Tellus in penatibus condimentum malesuada ante vulputate nisi, arcu leo. Amet urna sapien purus vestibulum fermentum a. Cursus metus massa donec sed varius. Nunc enim sit morbi lacus, molestie et nunc. Nullam sed facilisi id malesuada. Ante purus velit, quam scelerisque ultrices scelerisque donec. Velit egestas vel ornare pellentesque ridiculus. Mauris tempor augue quis mattis suspendisse feugiat commodo posuere. Faucibus massa adipiscing nullam elit, ac vel accumsan. Phasellus eget ac dignissim fermentum ac placerat elit, metus. Nulla porttitor ante egestas molestie quis quam. Pharetra magna sit mauris tellus gravida rutrum libero sit. Justo orci cras euismod proin massa lorem ut. In non tellus phasellus faucibus ullamcorper nullam odio dui et.

Heritage Bank

Stewart Saunders

MFAA head credit adviser, Finsure Finance and Insurance

Christopher Lee

MFAA head credit adviser, Finsure Finance and Insurance

Stewart Saunders

Heritage Bank

Cameron Poolman

OnDeck

Andrew Morrison

ubank

Industry experts

ubank

Andrew Morrison

OnDeck

Cameron Poolman

Heritage Bank

Stewart Saunders

MFAA head credit adviser, Finsure Finance and Insurance

Christopher Lee

Andrew Morrison

ubank

Cameron Poolman

OnDeck

Stewart Saunders

Heritage Bank

Christopher Lee

MFAA head credit adviser, Finsure Finance and Insurance

Mark HarChristopher Leeon

Heritage Bank

Stewart Saunders

OnDeck

Cameron Poolman

ubank

Andrew Morrison

Money transfer

Equity funding

P2P lending

Mobile payments

Trading platforms

Other services

Digital payments

Business finance

Consumer finance

Source: Research and Markets

How valued are these mobile app features (by age group)?

Source: RFI Global Survey

Companies

People

Newsletter

About us

Authors

Conditions of Use

RSS

News

Mortgage Industry

Best in Mortgage

Specialty

Resources

Ability to search all your transactions based on key words

Bill tracker

Ability to access your credit score with regular updates

Financial health tools

Spending insights

Under 35

Over 35

10%

20%

30%

40%

32%

19%

25%

18%

24%

16%

23%

12%

22%

13%

Companies

People

Newsletter

About us

Authors

Conditions of Use

RSS

News

MORTGAGE INDUSTRY

BEST IN MORTGAGE

SPECIALTY

Resources

Harnessing the insights of tech tools For individuals, the advantages provided by fintech are also in sharp relief in the less certain economic environment of late 2022. “Rising interest rates have created high inflation and high costs of living, and we now know that people are thinking about their money every day,” says Morrison. “It’s important for customers to know where their money is being spent, how it’s changing over time, and what bills are expected each month.” As the rate-hiking cycle looks set to continue for now, any insight from fintech tools into extra savings that can be rechannelled to paying off a home loan quickly can translate into less mortgage stress. RFI Global data shows that when it comes to accepting guidance and tools from a financial institution, younger consumers are more open to the idea. They are more willing to hear from their lender when it comes to tips on money management.

Companies

People

Newsletter

About us

Authors

Conditions of Use

RSS

News

MORTGAGE INDUSTRY

BEST IN MORTGAGE

SPECIALTY

Resources