Australian Challenger Banks: Who’s Who

MEDIA / AUGUST 07, 2018

With several new entrants trying to muscle into the Australian banking sector and upset the big four, FinTech Futures has created a comprehensive list of the known challengers to date and the technology they are using.

We’ll be revisiting and updating this list on a regular basis. If you have any additions to the list, please get in touch with our editorial team.

Pelikin

Digital banking start-up Pelikin aims to reshape the way people save, send and spend their money in Australia and while travelling abroad. The company’s slogan is “spend like a local”. The founder is Sam Brown.

It will be targeting “digital natives” with its app and debit card. It is beta testing features such as immediate currency conversion, foreign bill splitting and group holiday saving goals.

Pelikin says it is doing away with complicated account numbers and instead encourages users to set a unique Pelikin handle, just like Twitter.

“Setting up a Pelikin account will take as little as three minutes and it will travel with you wherever you go,” Brown says. “Gone are the days of notifying your bank that you’re travelling overseas or waiting over 24 hours for a bank transfer from a friend to come through.”

86 400

Launched in June 2018, the bank is led by former ANZ Japan CEO, Robert Bell, and ex-Cuscal Payments CIO Brian Parker. Joining as incoming chairman is Anthony Thomson, co-founder and former chairman of Atom Bank and Metro Bank.

It is fully funded and backed by Cuscal, Australia’s largest independent provider of end-to-end payments solutions. The plan for 86 400 requires in excess of $250 million of capital over the first three years of operation, with “additional shareholders expected over that period”.

86 400 will launch in beta towards the end of 2018 and intends to launch to the public in the first quarter of 2019, complete with a transaction and savings account from day one. It has been working with the Australian Prudential Regulation Authority (APRA) and is “well progressed” into the process of obtaining a full banking licence.

86 400 will be available as both an iOS and Android app from launch.

Judo Capital

Melbourne-based Judo Capital officially unveiled its banking plans in March 2018 as it targets the nation’s SME sector.

Judo says it has started the process of applying for a banking licence from APRA – the culmination of a “strategic build-up of the company” over the past three years. Its model is based on UK challengers such as Aldermore, Shawbrook, and OakNorth.

For its tech, it uses a variety of different vendors. Unifii’s Business Transformation Platform is used for its technical infrastructure. For its small business lending platform, it will use one from Realtime Computing, based in Perth, Australia.

To deliver both the platform and application, Judo turned to Microsoft and BankSight. The latter provides a banking CRM and deal builder solution for use both by Judo lenders and partner brokers.

Also involved in the AWS-based lending platform is Brisbane-based Itoc. Judo states that it was designed and built from the ground up in six months.

Tyro

This Sydney-based bank has been around since 2001 and says it is Australia’s “largest independent Eftpos provider”. It is focused on SMEs and has a licence to provide banking products by APRA. At present, Tyro has around 400 staff members.

In March, it unveiled Tap & Save, to enable merchants to process debit tap-and-go payments through the Eftpos network.

Tyro provides integrated payment, deposit and unsecured working capital solutions for more than 20,000 SMEs, and collaborates with more than 200 POS providers and cloud accounting platforms.

In its fiscal year 2017, it states that it processed more than $10 billion in payment transactions, generating $121 million in revenue.

UBank

Unveiled in 2008 and developed and supported by National Australia Bank (NAB). It operates under NAB’s banking licence, and offers home loans, online savings accounts, and term deposit accounts. UBank has more than 400,000 customers.

It has launched Free2Spend – an in-app tool for personal finance management (PFM); and RoboChat, a virtual assistant for online home loan applications. The latter was built with IBM Watson.

For its core banking tech, UBank uses Oracle Banking Platform (OBP) from Oracle FSS (and so does its parent, NAB).

Volt Bank

Sydney-based Volt Bank was given Australia’s first new restricted banking licence and is now working towards becoming a fully licensed bank.

The bank says it is “mobile first” and is in the early stages of its life. For example, it is recruiting staff and calling for investors.

For its core banking system, Volt has selected Temenos’ T24.

The bank was founded by Steve Weston (CEO) and Luke Bunbury (deputy CEO), who have both worked in banking and financial services.

Xinja

The neobank emerged from the shadows to unveil its plans for a mobile-only digital bank in 2017. It will have no bricks and mortar branches.

Eric Wilson is Xinja’s chief executive and a former National Australia Bank (NAB) executive. Xinja might be new, but it will have some handy experience on tap. Jason Bates, a co-founder of UK digital challenger bank Monzo, has joined the Xinja board.

In March 2018 it unveiled its prepaid travel and spending card and app. Xinja says it plans to launch deposit accounts, and mortgages and credit cards. Its home loans were released in April 2018 as a beta product. Once it gets its bank licence, Xinja says it will immediately launch current accounts.

For its tech, it uses SAP Cloud for Banking. This provides open banking capabilities, and integration to payment systems and business networks. Xinja can also offer APIs to use and has a mortgage origination platform. The latter is supplied by Australian fintech specialist Iress.



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