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New digital bank to offer home loans

by Reporter11 minute read
home loan, digital bank

A new digital bank will enter the mortgage market in the first quarter 2019 as it looks to challenge the traditional lending landscape.

Wholly owned by payments solution business Cuscal, 86 400 is a new digital player launching into the Australian banking market and will be made available as both an iOS and Android app from launch.

At an event earlier this week, it was announced that 86 400 — named after the number of seconds in a day — intends to launch to the public in the first quarter of 2019, after beta testing “towards the end of 2018”.

The platform, which is “well progressed into the process of obtaining a full banking licence” and has reportedly been “working closely” with the Australian Prudential Regulation Authority (APRA), is headed up by UK neobank veteran Anthony Thomson (founder of digital bank Atom Bank), former ANZ Japan CEO Robert Bell and former Cuscal CIO Brian Parker.


Several other former bankers have also joined the leadership team, including:

  • Guy Harding as chief risk officer (formerly CBA’s international chief risk officer)
  • Travis Tyler as chief product and marketing officer (formerly GM of digital at Westpac)
  • Matt Chan as chief operating officer (formerly head of operations at Australian Unity Banking)
  • Neal Hawkins as chief financial officer (Cuscal’s former head of finance)
  • Caroline Milner as program director (former Westpac and AMP project director)

It will first offer transaction and savings accounts in the first quarter of 2019, with home loans following “shortly after launch”.

The bank has not yet said if it will partner with the third-party channel, but further details on the product offerings and systems are expected later in the year.

Speaking of the formation of the new digital bank, Anthony Thomson, 86 400’s incoming chair, said: “Australians deserve more from banking. They expect better treatment and a better experience, and that’s exactly what we’re here to provide.

“And because 86 400 will ultimately have a lower cost ratio than a traditional bank — completely free of expensive, cumbersome legacy technology and physical branches — we’ll be able to provide better-value products for customers and better returns for our investors.”

He continued: “For too long, banks have put profits before their customers — that’s become the great malaise of the industry. We firmly believe that profit is a by-product of doing something great for the customer.”

CEO Robert Bell added: “In order to compete with the big banks, we not only need to offer the full range of services, but we also need to do things differently. 86 400 will have a beautiful, intuitive app, but that won’t be where it ends. We’ve invested a huge amount of energy into building a bank that is technology-led from the start.

“The crucial thing is the interplay between the core banking ledger and the technology. The technology has to work with the ledger, not for it. Only then will customers have a bank that’s working for them. That’s exactly what we’re building.”

Craig Kennedy, Cuscal MD, said that the company had backed 86 400 “because nobody in Australia is leveraging all of the capabilities available to maximise the banking experience on your mobile”.

It is anticipated that 86 400 will require in excess of $250 million of capital over the first three years of operation, with additional shareholders expected over that period.

The past 12 months has seen a rise in the number of digital banks coming to the fore, with the first restricted authorised deposit-taking institution licence (RADI) granted to digital bank volt, run by mortgage veteran Steve Weston, in May of this year, and crowdfunded online lender Xinja announcing plans to utilise the broker channel to facilitate its digital home loan approval process.

[Related: NAB looks to challenge fintech space]

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