Shadow banks swoop as five lenders quit sub-prime home loans
Digital home-loan lender Tic:Toc is launching into the sub-prime mortgage market targeting small business owners as five other lenders quit the sector claiming “industry changes”. Tic:Toc’s move follows stakes being taken in the online lender by Genworth Mortgage Insurance Australia and La Trobe Financial, which is part of the US investment giant Blackstone Group. Other major lenders, including Commonwealth Bank of Australia and Bank of Queensland, pulled out of the sector to be replaced by regulation-lite shadow banks, including Pepper Money and Resimac. Adelaide Bank, Perth-based Bluebay Home Loans and Resolve Finance’s mortgage division are also quitting the sub-prime sector blaming changing marketing and funding conditions. The move comes amid […]
How the Banking Royal Commission will affect the auto-financing industry
The recent release of the banking royal commission’s interim report has highlighted that responsible lending practices need to be extended to the auto-finance industry. The implications of this for entities making car loans is significant as 90% of all car sales are currently arranged through finance, many of which have fallen short of responsible lending provisions. According to the report it is not enough just use ‘likelihood of default’ as a measure of loan suitability. Prior to making an assessment on whether a loan is suitable, the licensee must now take a number of steps to ensure responsible lending provisions are met. These necessary steps include: “making reasonable inquiries about […]
UBank launches AI mortgage application assistant
A new artificial intelligence-powered mortgage application assistant will soon be able to answer customer questions in natural language, UBank has announced. UBank has revealed that its new AI-powered digital home loan application assistant, called Mia (short for My Interactive Agent), will start answering more than 300 common customer questions in real time from late February. The NAB subsidiary, which worked with FaceMe to develop Mia, said customers will be able to converse in natural language with the AI assistant via their desktop or mobile devices at any time about their mortgage applications. For example, customers could ask about what the variable rate of a loan is or what classifies as […]
CBA plugs 500,000 customers into Apple Pay in just two weeks
The Commonwealth Bank of Australia’s backflip on its longstanding Apple Pay boycott has paid off in spades, with more than half a million people flocking to the new payment service just two weeks after it was made publicly available to customers. The stampede of iPhone users is so big it has boosted the CBA’s total number of mobile banking by half, propelling the number from 1 million Android users to a total of 1.5 million total mobile numbers. The fresh numbers were revealed to investment analysts this week by CBA chief executive Matt Comyn, who credited the bank’s customer engagement platform for the delivering the result, before outlining how robust […]
Neo-lender Wisr sees increase in banking defectors amid Banking Royal Commission
Neo-lender Wisr (ASX:WZR) has launched a bold new campaign targeting disillusioned customers of big banks, following the Hayne Royal Commission handing down its findings into consumer lending practices. The ‘Australia’s Getting Wisr’ campaign taps into the prevailing sense of unfairness that Australians feel towards the big banks and how customers can make smarter choices when seeking personal loans. The campaign in the coming months will showcase the company’s personal loan, financial wellness programs and new smartphone application. It is the first brand campaign undertaken by Wisr since launching the brand in March 2018 and will appear nationally on television and online from this week. Earlier this week the Hayne Royal […]
Australian fintech leaders and startup founders react to the Hayne royal commission final report
After nearly 70 days of hearings, pouring through more than 10,000 public submissions the banking royal commission’s final report has been released. In it, Commissioner Hayne explains that one of the “complicating” factors is the impact of technological developments on the financial advice industry. Hayne writes: “Many in the industry have recognised that technology is likely to play an important role in the future of financial advice, but there is not yet a clear picture of what that role might be. Any recommendation directed to altering the current structure of the industry would need to grapple with the fact that the industry itself will very probably look very different in […]
Bank sector transformation will come with open banking, competition: Xinja
Australian neobank Xinja said transformation of the financial services sector, described by Royal Commissioner Kenneth Hayne as often driven by greed, will only happen when consumers have clear choice, and can move easily and quickly between banks and other providers within the banking sector. The final report from the financial services Royal Commission paints a damning picture of the culture that drives Australia’s banks, with Commissioner Hayne imploring those who run Australia’s biggest and most profitable financial institutions to ‘obey the law’, ‘act fairly’ and offer services that are ‘fit for purpose’. “The reality is, the reason we’ve reached this low is that the sector has been controlled by a […]
Australian regulator vows to tackle ‘cosy oligopoly’ of big banks
Australia’s competition regulator plans to wrest open the “cosy oligopoly” of the country’s four largest banks and punish misconduct via the courts, saying competition is the best way to fix the troubled sector. In an interview before the publication of a public inquiry report into the finance sector on Monday, Rod Sims, chief executive of the Australian Competition and Consumer Commission, said more competition was needed to protect consumers. Australia’s four biggest banks — ANZ Bank, Westpac, Commonwealth Bank of Australia and National Australia Bank — control more than 75 per cent of the domestic market. They enjoy lower funding costs than smaller competitors, due in part to an implicit government guarantee to save […]
