Digital neo-lender 86 400 has been granted a full authorised deposit-taking institution licence by APRA and will look to fully focus on brokers when it launches its mortgage products later this year.
86 400, a neobank that has been gearing up for launch for the past few months, has officially been granted a full authorised deposit-taking institution (ADI) licence by the Australian Prudential Regulation Authority (APRA).
The full licence means that the lender can demonstrate it can meet the full prudential framework and is ready to commence banking business.
As such, 86 400 has said it will launch with transaction and savings accounts once its customer-facing app goes live in the Apple and Google app stores within the “next few weeks” and will offer home loans to customers in the near future, too.
Speaking to The Adviser, 86 400 CEO Robert Bell revealed that the bank will be rolling out its mortgage products in the next two to three months and will be launching exclusively through the mortgage broking channel.
Mr Bell said: “We are focusing entirely on mortgage brokers and that is how we will start our mortgage product launch. With the number of people that go through mortgage brokers, it is the obvious place to start.
“We don’t think anyone has really solved a direct digital home loan yet – it will probably happen in the future – but we see brokers as absolutely critical to our success and that is why we’re starting with brokers.”
The CEO said he hoped that the bank’s use of data would help streamline the application process for brokers and provide “a more informed view of people’s expenses and their income to enable a much faster decision-making process”.
“We think that is where we can really use data in the first instance, and we’ll be able to share more about that closer to launch,” he said.
New broker team
The bank recently appointed George Srbinovski, AFG’s former senior recruitment and portfolio manager NSW/ACT, as its national manager of broker distribution to help develop and deliver its broker strategy and build a broker-friendly mortgage product.
Mr Bell revealed that the bank had also hired three new BDMs this week to support the broker product rollout.
The new BDMs are former Macquarie BDM Emir Comertpay (covering NSW), former Liberty adviser and sales manager Danielle Morrison (Victoria), and former ME Bank BDM Renzo Perri (Queensland).
“Renzo is based in Brisbane, Danielle is in Melbourne and Emir is in Sydney and we have plans to bring in more BDMs as we grow. So, we’re starting off with a sensible strategy, but we will ramp up fairly quickly once we’re live,” Mr Bell told The Adviser.
According to the neo-lender CEO, 86 400 has already signed partnership agreements with Vow Financial and SFG (Specialist Finance Group) and is said to be “bringing a third [aggregator partner] on shortly”.
Mr Bell told The Adviser: “We are well positioned already for the launch. These mortgage brokers will have access to the mortgage product as soon as it is available, and we are really conscious that we have to create a great experience for brokers.
“So, we’ve done a lot of things to make the process of collecting data and getting an application done really quickly through brokers. We will be using some brokers early in the stage to test everything to make sure it runs smoothly, and we’ve brought George on and a team of new BDMs that will be working through with the brokers.”
Transaction and deposit accounts
The neo-lender has said that it will also harness the use of data and analytics to give customers a better insight into their spending and savings habits, enabling them to plan forward, as well as look backwards.
From launch, 86 400 customers will have access to all the digital pay systems (such as Apple Pay, Google PayTM, Samsung Pay, as well as FitBit Pay and Garmin Pay) along with a Visa debit card, ATM access and customer support.
Commenting after the approval of its ADI licence, Mr Bell said: “For the last two years, we’ve been busy building a smarter alternative to how Australians bank. Today’s news confirms we’ve passed all of the necessary checks and balances required to call ourselves a bank.
“This has been an incredibly thorough process, and we’ve had every element of our business stress-tested to confirm that we are as robust, secure and safe as any bricks-and-mortar bank. The only thing remaining is to bring 86 400 to market, which we’re now very close to doing.”
He added: “I’m so proud of our team for all the work that’s gone into getting us to this point – but we’re only just getting started.”
Anthony Thomson, chairman of 86 400 and former founder and chair of two successful challenger banks in the UK, said: “From early on, we’ve been incredibly confident that what we’re building will offer Australians a smarter alternative to the big four banks.”
“Smart tech is everywhere: smartphones, smart cars and even smart homes. They exist to make our lives easier and more convenient. But when it comes to managing our finances, these same benefits haven’t been available to us until now. Designed for smartphones, our smart bank will help people take control of their money, offering far more than they’d expect from a bank.”
He continued: “With the latest technology, a simpler operating structure and streamlined systems and processes, we’ll be able to make savings that are passed on to our customers and better returns for our investors. To get APRA’s approval today is a testament to the incredible work of the 86 400 team over the past two years.”
[Related: Neo-lender appoints first broker head]