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Judo to evolve broker proposition, expand products

9 minute read

Finance brokers using the SME bank will soon see a new offering, as part of a reboot.

SME lender Judo Bank is evolving its broker proposition and expanding its product range as it aims to further embed itself into the fabric of Australia’s small and medium-sized enterprises (SME) lending ecosystem.

The commercial bank has announced that it will pilot new partnership models with selected brokers and launch new products designed to meet growing demand in areas such as working capital.

In a strategic shift aimed at aligning incentives more closely across the value chain, Judo will trial a new broker engagement model over the next 12 months with approximately 15 top-performing brokers.

 
 

Speaking to The Adviser in a media briefing on Wednesday (4 June), the SME bank said the move reflects the bank’s recognition of brokers as essential partners in the lending process, particularly in serving SMEs.

Frank Versace, chief growth officer at Judo, said: “If we have a genuine tripartite relationship with a broker, then part of their marketing cost should be our marketing cost, because we’re trying to provide a great service to the same customer.

“So we might recognise that by allocating part of our marketing budget to our top brokers to help them market a superior service offering for SMEs that includes placing the lending with Judo Bank.

“We won’t say you need to put a banner up that says Judo, but if that broker is providing a great service to SME and is marketing to try and expand their business, that ultimately is good for us, it’s good for the customer, it’s good for the broker. And so we’re prepared to recognise that through allocating a portion of our market budget to help the broker grow their business.”

Versace said that the bank would also look at revisiting the commission model.

“We will look at commissions, but in a way that aligns bank and broker,” he said.

“We think that there is an end-to-end value chain, where we play different roles and we leverage different skill sets and different competitive advantages between us [the bank] and broker. So how do we create a commission framework that is more reflective of that, which actually makes the customer a winner, the broker a winner and the banker a winner. And where are we more aligned?

“We haven’t really thought all the way through that, but that is potentially something that we’re building on.

“There may be a way to recognise greater tenure and a better collective value proposition to the customers. There may be a better way to recognise that than 60 basis points up front and 30 basis points trail (which actually encourages churnand is not necessarily always in the best interest of the customer).

“We might recognise that through commission for brokers who hold bigger portfolios with us, and therefore have servicing obligations – for example, if they collect financials for annual reviews and they collect the information that’s necessary for us to test covenants – we might recognise that in a more overt way.”

Versace said that Judo’s book did not see a difference in rates, margins, or credit quality between direct and broker channels, adding: “So we asked ourselves – what are we really getting for our trail commissions?

“This alignment of incentives is about what we get for the trail. We recognise that brokers actually play quite an important role in the relationship that an SME experiences with the finance industry.

“If a broker is delivering value to an SME and promoting that service, then ultimately, that benefits us too.

New at-call products in development

Alongside its evolving broker model, Judo Bank said it was also expanding its product offering.

Over the past year, the bank has made inroads into the agribusiness sector and has plans to launch additional SME-focused financial products. These include enhancements to its working capital offerings, such as improved payment functionality within existing lines of credit, potentially eliminating the need for separate transaction accounts.

To further strengthen its deposit base, Judo will launch two new savings products: a business online savings account and a high-interest online savings account aimed at both SMEs and high-net-worth individuals seeking competitive rates in a digital-first platform.

Judo is also exploring strategic partnerships with select private lenders. These include a proposed mutual “right of first offer” arrangement, designed to provide customers with smoother transitions when their credit profiles evolve, offering a path to alternate financing before a relationship is disrupted.

The changes come after the SME bank continues to build its commercial loan book. In its half-year results for the financial year ending June 2025 (FY25), the SME challenger bank reported a new record in gross originations.

At its investor presentation in February, Judo Bank reported $2.3 billion in new lending for the six months ending December 2024.

This figure represented a 27.77 per cent increase on the previous corresponding period (1H24), when the SME lending specialist reported gross originations of $1.8 billion.

Judo Bank’s total loan book has now grown to $11.6 billion, according to the SME challenger bank, a $900 million increase from $10.7 billion recorded in the last reporting period (2H24).

The proportion of loans written by brokers remained unchanged for the second successive reporting period at 75 per cent.

[Related: Judo Bank reports record new lending]

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Annie Kane

AUTHOR

Annie Kane is the managing editor of Momentum's mortgage broking title, The Adviser.

As well as leading the editorial strategy, Annie writes news and features about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape.

She is also the host of the Elite Broker, New Broker, Mortgage & Finance Leader, Women in Finance and In Focus podcasts and The Adviser Live webcasts. 

Annie regularly emcees industry events and awards, such as the Better Business Summit, the Women in Finance Summit as well as other industry events.

Prior to joining The Adviser in 2016, Annie wrote for The Guardian Australia and had a speciality in sustainability.

She has also had her work published in several leading consumer titles, including Elle (Australia) magazine, BBC Music, BBC History and Homes & Antiques magazines.  

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