Fintech business Cashwerkz has finalised its merger with listed financial services group Trustees Australia as it positions to target the $2.1 trillion cash deposit market.
Trustees Australia announced the deal with the fintech back in December 2016. With the merger finalised, the group will increase awarness of its online offering of defensive assets including term deposits.
Investors will have the ability to access these prodcuts from over 30 Australian banks including credit unions.
Term deposits can usually take up to seven days to finalise but through Cashwerkz, investors can finalise a terms deposit in a few minutes. Investors will also be able to switch easily between banks at maturity.
Other fixed income assets such as bonds and annuities will also be available on the platform.
According to Cashwerkz non-executive director, John Nantes, the strategy behind the merger of the two businesses was about adding value, not disrupting the market.
“The new business brings together a long history of managing fixed income and terms deposits through Trustees Australia and the new technology of Cashwerkz,” Nantes told AB+F. “It’s about bringing a trusted brand with the new innovations to enhance the solutions for investors."
Nantes added that the business will also encourage more competition in the $2.1 trillion cash deposit market, which is dominated by the major banks – currently 80 per cent of term deposits are held with the big four.
“For us this market provides us with a huge opportunity. Even just taking 1 per cent of the market share will give us $20 billion in investment inflows.”
Over the last two weeks, over $6 million has been invested through the platform.
Cashwerkz chief executive Hector Ortiz said the business planned to grow its awareness in the market by working with financial advisers, accountants and self-directed investors.
“Self-directed investors and advisers are looking at easier ways to invest in defensive assets like fixed income but with the transparency and security,” Ortiz said.
Nantes also acknowledged recent industry commentary on how disruptors have failed to take significant share from the incumbents such as the big banks. He is also the executive chair of marketplace lender Direct Money.
“Disruptors such as fintechs will never succeed by taking on the banks alone. Banks have been adopting a smart approach by partnering with fintechs to help them grow their market share. Cashwerkz will be adopting a similar approach by collaborating with the banks.”