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Bank eyes broker channel as it revamps

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Annie Kane 7 minute read

A non-major bank has undergone a digital overhaul as it prepares to be acquired by Challenger and potentially expand into the third-party channel.

Australian bank MyLife MyFinance, currently owned by Catholic Super, has launched a new front-to-back digital banking platform and is looking to expand into new channels as it prepares to be acquired by Challenger.

New banking system

The new banking platform, delivered as Temenos Saas (software as a service), aims to help MyLife MyFinance accelerate growth, differentiate customer experiences, and reduce costs.

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According to Temenos, the platform uses the Temenos Country Model Bank methodology and can help achieve straight-through processing for 90 per cent of new customers and streamline the loan application process.

It reportedly helps banks run their operations at 10 per cent of the cost of their legacy technology stack and reduces loan document preparation time from 60 minutes to five minutes.

The system also integrates with third-parties to create an “open banking ecosystem” to enhance services like customer verification, digital wallets and fraud monitoring.

Mark Sawyer, general manager of MyLife MyFinance, commented: “For MyLife MyFinance, innovation means finding ways to create the best possible outcomes for our customers. We partnered with Temenos to create an ecosystem of innovative fintech solutions to improve our service levels and simplify processes.”

Jean-Paul Mergeai, president of MEA and APAC at Temenos, commented that the company was “delighted” that MyLife MyFinance had completed its digital transformation journey, adding: “The bank will be more agile in its ability to launch new products more quickly and onboard more customers and originate more products and services digitally.”

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The Challenger acquisition

The technology overhaul comes as MyLife MyFinance prepares to be acquired by investment management firm Challenger Ltd and considers breaking into third-party distribution.

Indeed, Mr Sawyer said the industry super fund-owned bank was looking at the potential to grow its presence via the broker channel.

Mr Sawyer told The Adviser: “Under the transition to our new owner, which is still subject to regulatory approval, we are exploring the broker channel as a way to grow our deposit base.

“Our intention is to automate the origination of new accounts via this channel – as we’ve done with personal accounts via the direct channel, to remove manual processes from the customer journey.”

The deal, which is subject to approval by the Australian Prudential Regulation Authority (APRA) and the Federal Treasury, would see Challenger acquire the Australian-based customer savings and loans bank for $35 million from Catholic Super’s MyLifeMyMoney Superannuation Fund.

According to Challenger, the acquisition will provide it with the opportunity to “significantly expand its secure retirement income offering” as MyLife MyFinance’s authorised deposit-taking institution (ADI) licence provides it with access to Australia’s $1-trillion term deposit market.

As such, Challenger said it will initially focus on expanding MyLife MyFinance’s term deposit offering with the acquisition providing a platform to “leverage Challenger’s investment capability, including its competitive advantage in private lending markets to drive additional growth via an ADI capability”. 

The deal would also provide Challenger with access to a wider range of customers through multiple distribution channels, including direct and via intermediated channels. 

Speaking when the acquisition was first announced in December, Challenger’s managing director and chief executive officer, Richard Howes, said: “Adding a digital domestic banking capability to sit alongside our existing Life and Funds Management operations will further broaden the ways in which we provide financial security for retirement and will further diversify our distribution channels. 

“Term deposits represent a significant asset class for Australian retirees, and entering the market provides an opportunity to play a greater role supporting the retirement incomes of our customers while also attracting a new cohort of customers.”

He continued: “Authorised deposit-taking institutions have had great success in attracting government guaranteed retail deposits. We see a significant opportunity to leverage our leading retirement income position and capability to manufacture guaranteed returns for our customers.

“Challenger has spent considerable time over the past two years investigating the requirements of an ADI licence to complement our existing businesses. This acquisition will enable us to accelerate this strategic initiative and access Australia’s term deposit market. 

“MyLife MyFinance has invested heavily in its technology, putting Challenger in a strong position to scale the business and streamline services for customers,” Mr Howes said.

It is expected that Challenger’s acquisition of MyLife MyFinance will finalise imminently.

[Related: BOQ to acquire ME Bank for over $1bn]

Bank eyes broker channel as it revamps
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Annie Kane

Annie Kane

Annie Kane is the editor of The Adviser and Mortgage Business.

As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts. 

Email Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

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