Fintech lender Alex has revealed that it has applied for a restricted authorised deposit-taking institution (RADI) licence from the Australian Prudential Regulation Authority (APRA) in a bid to enable it to offer deposits, in line with its strategy to extend the scope of its services and eventually secure a full banking licence.
The personal loan lender – which was founded by former Suncorp executives Simon Beitz and Craig Fenwick earlier this year to “offer simple, fair and fast products and services that use the latest technology and data and put the customer back at the centre of banking” – has also now launched its first consumer lending products.
Its consumer loans of up to $30,000 are payable from six month to five years with no ongoing fees and no early repayment penalties.
The average interest rate is said to be 12.99 per cent pa (12.99 per cent pa comparison rate).
The fintech has not commented on whether it will look to issue mortgages in future.
The co-founder and chief executive officer of Alex, Simon Beitz, commented: “Our aim is to provide Australians with fairer banking products that are simple to understand and easy to use, meeting the needs of consumers that the big banks have forgotten about.
“It is time Australians had a better way to bank. We are building a new bank from the ground up, leveraging the very best technology, artificial intelligence and hybrid team of experienced bankers, technologists and designers to give faster credit decisions, humanise banking and ultimately give our customers a better deal.
“Consumer behaviour is shifting. Customers now compare their bank interactions with social media, entertainment of retail interactions. They are after speed, transparency and value through digital channels, but they also want good customer service, flexibility and no hidden agendas. Alex provides this.”
Co-founder and chief financial officer Craig Fenwick said the fintech had secured $26 million of funding “from a variety of investors”, as well as an additional $10 million in wholesale debt funding from Sturt Capital Partners, “providing the firepower we need to grow our lending products in market”, he said.
Mr Fenwick continued: “We are targeting high-quality customers who are tired of being ignored by banks that are focused on low margin property lending. Our dynamic and stringent credit risk platform, developed in-house and driven by data, allows customers to apply for a loan in five minutes and have it funded within three hours.
“Thanks to technology, checks such as identity KYC and AML, fraud, loan serviceability, income verification and responsible lending assessments can be completed in just a few seconds. This results in very few circumstances where Alex needs to ask customers for additional information to make a good lending decision,” Mr Fenwick added.
[Related: APRA grants RADI licence to new entrant]
If you’re feeling overworked and overwhelmed in this fast-paced mortgage market, it’s time to make some changes, and the Business Accelerator Program can help! Early bird tickets are on sale now. Work smarter, not harder, this year.
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.