The challenger bank

by Melanie Mingas08 Oct 2018

The newly merged Finsure and Goldfields Money will provide lending solutions via broker distribution, but with a digital twist. Goldfields Money executive director and CEO Simon Lyons explains

Completed in September, the merger of Finsure and Goldfields Money Limited (ASX-GMY) claims two Australian firsts: it is the first time a bank has merged with a mortgage aggregator, and the newly formed entity has pledged to become Australia’s first “truly scalable digital challenger bank”.

Announcing the deal, Simon Lyons, Goldfields Money executive director and CEO, said the new model would focus on providing lending solutions via brokers, while creating a market-leading digital banking platform to “shake up the Australian banking sector”.

The deal combines Finsure’s broker network – 1,400 strong and backed by a further 5,500 with access to Better Choice loans – with the reach of an ambitious regional bank that’s already embracing digital. It follows Finsure’s acquisition of LoanKit in 2013, and Finsure Group co-founder and MD John Kolenda has said further acquisitions could follow.

Goldfields loans have been available through Finsure brokers since September, and a joint strategy has been implemented, with Lyons reporting there is an “active program to physically grow the business”.

He says no redundancies are expected but a name change is on the cards – proposals will be made to shareholders in November – and the newly formed entity is due to undergo a rebranding process.

The digital challenger

The key to the new firm’s future strategy is the creation of a market-leading digital platform that will offer a new customer banking experience.

“The core elements of a digital bank are always around people, process and product, but you need distribution. Distribution is the key part of any platform,” says Lyons.

Brokers will remain the key channel for distribution, and new digital tools will support both their work and the customer experience. In Lyons’ own words, it’s about using customer data to better anticipate customer needs, and then creating products and services to meet them.

“Our plan with Finsure is to invest a lot of money into technology around making the user experience better, and around improving the access customers have to their own information, to enable them to make smarter decisions around banking and finance more generally,” he explains.

“Effectively, when people think of digital banking they only think about apps, internet banking and smartphones. But really, it’s what’s in the back,” Lyons says.

In response, over the last year brand-new systems have been commissioned, powered by Temenos – which provides systems to 41 of what it terms the “top 50 banks” globally. The intention is a seamless user experience that leverages data without the need for processing.

“The core elements of a digital bank are always around people, process and product, but you need distribution” - Simon Lyons, executive director and CEO, Goldfields Money

While it’s partly about replacing legacy systems and creating efficiencies, the wider strategy is also about enhancing reach with customers, giving them ownership of their data beyond the provisions of open banking, and personalising the experience in the process.

“You collect an enormous amount of information when you write a loan for a customer and when you have 1,400-plus customer-facing brokers you get a lot of intelligence about what the market wants and what they need in terms of product; what works and what doesn’t,” Lyons says.

“For us, the digital bank is a means of actually being able to grow our business in a really economical and scalable form. Ultimately, what that means is benefits to the customer such as quicker turnaround time, and more efficient things across the way we operate as a bank.”