Codat arrives in Australia through an alliance with Judo Bank

  • By Zilla Efrat

Codat, the API enabling SMEs to share and synchronise financial data, has entered the Australian market after forming a strategic alliance with Judo Bank and local hires.

The alliance will enable Judo SME customers to digitally share access to their financial statements with Judo in just a few clicks, replacing the frustrating back and forth of exchanging financial information over email.

According to Codat, its universal API provides standardised access to over 30 systems used by small businesses, including banking, commerce platforms and the accounting software used by 97 per cent of Australian SMBs.

Codat says its technology is used by over 130 clients to power a wide variety of use cases across sectors. Aussie veterinary software platform, for example, Petbooqz uses Codat to push sales data into its customers' accounting software while Comma uses the technology to power its end-to-end payments process. It is also utilised by lenders, such as Swoop, to provide their customers with faster and more personalised finance.

The London-born fintech platform has identified the Australian SMB market as a business opportunity because of its recent growth. Recent ABS figures show that in the financial year 2020/21, there was a 3.8 per cent (87,806) increase in the number of businesses, with a total of 365,480 new businesses cropping up, most of whom will rely on some form of accounting software.

Codat notes that Australia is the most advanced in terms of coverage and adoption of cloud accounting platforms, in part due to the recent introduction of single touch payroll (STP) regulations and the pioneering development of platforms like Xero.

Codat believes this level of market saturation presents an increased opportunity for the application of SMB data and is now investing in its physical presence in Sydney with several local hires.

Codat has hired seasoned entrepreneur Matthew Tyrrell as APAC commercial director to lead the company’s local operations. Before joining Codat, Tyrell founded a management software start-up, CurrencyVue, which was subsequently acquired by Worldfirst (Ant Group). He brings over 15 years of technology and financial services expertise to the Codat team.

“We know the average Australian small business now uses more than 40 different applications. Codat is well-positioned to unlock value and utility from these applications,” says Tyrrell.

“At Codat we’ve dubbed this phenomenon open finance; a natural progression from open banking, that allows SMBs to harness the data from the most important systems they use, like accounting, PoS and e-commerce platforms.

“It’s these systems that are the central source of truth for business data, not bank accounts. Ultimately, connectivity to these systems has the greatest potential to reduce the administrative burden for small businesses and drive better access to financial services.”

Tyrrell adds: “The proliferation of financial services in the local market, plus the coming of a second fintech wave fuelled by open banking and initiatives like the new payments platform, place Australian

fintech innovators in a prime position to capitalise on open finance and offer seamless customer experiences.

“Through the breadth and depth of connectivity we offer across multiple data sources, Codat plans to become the platform that Australian fintechs of the future are built on,” he says.

“Our purpose at Judo is to be Australia’s most trusted SME business bank and to serve SME businesses via relationship-led banking empowered by data and technology,” says Lisa Frazier, COO at Judo Bank.

“Through our alliance with Codat, we will enhance the quality of the conversations we have with our customers through the access of rich, real-time data. This will further strengthen our customer relationships and the proactive advice we give.”

Codat's API powers services of five of the world's largest financial institutions, 12 technology unicorns and many specialised SMB providers. These include Zettle by Paypal, Finstro, and Cloudfloat.

The Codat and Judo Bank integration will be available for SMB customers to leverage from early 2022.