Tech leaders shaking up the finance industry

by Mike Wood01 Apr 2021

Fintechs are leading the technological revolution in Australian lending, taking the everything online, instant access attitude of the modern consumer and applying it to banking.

KPMG’s Fintech Landscape 2020report released in December shows there are 733 active fintechs, up from 629 in September 2019, with fintech lenders and neobanks leading the way.

For our latest edition of Australian Broker, we sat down with a few of them to get the opinions on how fintechs are changing the landscape of lending in Australia.

“We know from OnDeck’s bespoke research that the SME market can be neglected by banks. As a result, one in four SMEs have been rejected by mainstream banks when it comes to securing commercial funding,” said Cameron Poolman, CEO of non bank fintech OnDeck. “Among those that do secure funding, the same proportion – one in four – face lengthy delays that have actually cost the business in terms of things like delivery of products or hiring new staff.”

“They are eager to explore new ending options that cut red tape from the loan application process and deliver faster loan approval times and turbo-charged delivery of funds. The expression ‘time is money’ absolutely holds true for the SME sector. This matters because it’s rare for SMEs to face exactly the same market conditions in the future as they have in the past. And never has our forward-looking approach been more relevant than during the pandemic, when SMEs have faced exceptional circumstances that are not indicative of normal trading conditions.”

It isn’t just non banks, however. Simone Tilley, general manager retail broker at ANZ, spoke about the two key technological tools the lender delivered in the early days of the pandemic, namely ANZ eSign and ANZ eVerify.

“With more of everyday life becoming digital, we are striving to continually provide helpful, easy-to-use and convenient solutions,” she said. “[We’re] using data and analytics to reduce the number of steps we ask brokers and assessors to complete to improve our time to first decision and significantly reduce rework, shortening our time to final decision, and to better understand our customers to ensure we are providing good outcomes for brokers and customers.”

CarClarity provides a simple-to-use digital platform that connects borrowers with more than 30 different car finance lenders. “It matches each customer with lenders based on the optimal price and loan terms for that individual’s needs,”  founder Zaheer Jappie says. “Once the best borrowing option is chosen, borrowers are guided through an online application process to secure their financing.

FinTech Australia, the peak body for the sector, now boasts more than 300 members – six times what they had when they launched five years ago. “We know the sector is growing,” said CEO Rebecca Schot-Guppy. “However, counting the precise total number of companies in Australia is difficult. Many of these studies are self-reporting, and founders are incredibly busy people. Others rely on the business needing to raise funds before being counted as an active company.”

FinTech Australia run the EY Fintech Census as a way of measuring how big the sector is. “More than 78% of companies in it are post-revenue, and the majority, 61%, have been in business for over three years,” said Tilley.

“Fintechs are incredibly customer-centric,” added Schot-Guppy. “Products are only launched where there is demand. Many fintech founders are former bank or financial services company employees. In their roles, they spotted ways that their company could improve their service and have ported this experience to their own company.”

“The difference now is that new innovations are being driven by new technology. Fintechs are finding ways to operate on leaner margins and provide superior customer service while still being fully compliant lenders.”

This is an extract from our fintech special - you can see the full story in the print edition of Australian Broker which is on desks from April 5.