Australia’s newest aspiring digital bank, Alex, has been granted a restricted licence from the prudential regulator after the neobank approved more than $8 million in personal loans.
The new challenger bank - which was set up by former Suncorp executive Simon Beitz - is focused on retail banking and will target consumer lending and high-interest deposit accounts.
In a release, Alex said it aims to win about three percent of the prime consumer lending market in Australia by targeting credit consumers first and foremost with “fast, competitive, and no fuss loans.”
The fledgling lender will then scale and build out key products that aim to improve the consumer credit and banking experience for Australians, making it faster, simpler, and fairer.
Beitz, the bank’s chief executive, said the strength of its lean and digital business model should achieve above industry average margins by targeting consumer lending funded by deposits.
According to the neobank chief, this strategy has fuelled much of the rapid growth of other lending-led institutions internationally.
“By solving Australians’ day-to-day credit needs, we’re helping customers get more of what they want in their lives and creating a bank based on what people have told us is important: fast, simple, fair and human banking products and services,” he said.
To date, Alex has raised more than $35 million from private investors.
Beitz said its leadership team brings a blend of extensive banking, technology, and customer service excellence, which underpins the Alex strategy to make banking better.
“One of Alex's core principles is to make banking fairer. This includes giving customers the fairest interest rate possible across both savings and lending products, without hidden fees and nasty surprises,” he said.
“We do this by using technology and processes that are fast and minimise friction and unnecessary risk. We believe we can provide some of the best products and interest rates in the market, without compromising customer service expectations, while still delivering a fair result to investors.”
Lower fees are achieved with its digital model, reducing overheads associated with traditional banking and branches, as well as its proprietary decisioning platform Alex Intelligence, which creates efficiencies and powers automation and the bank’s simplified offerings, the lender said.
The technology has processes 10,000 loan applications - which take just three minutes to fill out - in the past six months, with a customer commitment to provide a decision on their loan application within one business day.
Its 90+ day arrears rate currently sits at zero.
Alex has also introduced a biometric verification process embedded in its application. Identity verification is done automatically and instantly through a photo capture of the applicant’s ID and a selfie of the customer. AI technology is then used to ensure they are the same person, reducing the risk of stolen identity and fraud, the neobank added.