86 400 has officially been granted a full authorised deposit-taking institution (ADI) licence by the Australian Prudential Regulation Authority (APRA) and expects to officially launch in the next few weeks.
The full licence means that the lender can demonstrate it can meet the full prudential framework and is ready to commence banking business.
Wholly owned by payments solution business Cuscal, 86 400 is named after the number of seconds in a day and intends to disrupt the traditional lending landscape by harnessing data analytics.
While the neobank is expected to launch its transaction and savings accounts to borrowers once its customer-facing app goes live within the “next few weeks”, the CEO of 86 400, Robert Bell, told Mortgage Business that it will look to roll out mortgages within the next two to three months.
Mr Bell revealed that the lender has already processed a staff mortgage internally and will continue to process more as it fine-tunes its process before launching the mortgage product.
Mr Bell told Mortgage Business: “We are about two to three months away from launching our mortgage products, but we are really well progressed with home loans already.”
Noting that the company had already brought in former AFG manager George Srbinovski as national manager of broker distribution to help develop and deliver its broker strategy and build a broker-friendly mortgage product, Mr Bell added that the company would be “focusing entirely on mortgage brokers” for its home loan distribution.
He said: “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.”
He added: “We really understand how important a role brokers play in someone’s life when they are getting a home loan or an investment loan for the first time – and it doesn’t need to be difficult or stressful. So, that is what we’ll be looking to solve,” he said.
The neo-lender has said it will 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.
For mortgages, Mr Bell said that 86 400 will be looking to utilise its technology to streamline the application process.
“Responsible lending is a really important and hot topic at the moment, and we are using data to provide a more informed view of people’s expenses and of their income to enable a much faster decision-making process,” he said.
“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.”
The CEO added that 86 400 customers will soon 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.
“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,” Mr Bell said.
“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 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: New digital bank to offer home loans]
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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.