FinTech Game Changers

FinTech Australia Podcast

We are stoked to announce that FinTech Australia has entered into a partnership with Tier One People to act as the main sponsor of the Tier One People podcast.

Recognising the close alignment in our mission to make Australia the No1 country for Fintech innovation, it makes perfect sense to join forces.

So what does this mean for our listeners?

First off if you are subscribed on Spotify, iTunes or any other medium you don’t have to do a thing. The podcast is now available to download on the FinTech Australia site.

We are beefing up the show with professional production, a monthly news style show as well as coverage of events like The Finnies, Intersekt and Global Fintech events like Innovate Finance, Money 20/20 etc.

The Fintech Game Changers series of leadership interviews will continue and we will also run dedicated episodes on hiring and careers advice. Including a special show this week on setting up remote working.

And given that the biggest challenge facing any founder is people, hiring and talent – the content of the show will be educational as well as entertaining.

FinTech Australia Director, Simone Joyce had this to say about the partnership: 

I am so excited that this has come about. The partnership fast-forwards the reason we started the podcast in the first place. Which was to promote the Fintech ecosystem. Tier One People are doing that in spades and with flare.

The combined networks of Tier One People and FinTech Australia members amplifies the reach to a global audience giving our members maximum exposure. 

Robert Bell 86 400
Robert Bell 86 400

“Our core company value is to help Australian’s take control of their money. So the 86 400 team have designed and built a smartbank that helps Australian’s take control of their money.”

Robert Bell, CEO, 86 400.

Robert, how did you get to build Australia’s first smartbank?

I am a banker by background, I spent 15 years with one of Australia’s Big 4 banks and was given the opportunity to run banks in the Pacific and Japan. I came back to Australia to run a mid- sized mutual bank, and immediately before starting 86 400, worked for Cuscal (100% shareholder of 86 400).

Cuscal has an impressive track record of enabling competition through innovation and technology. They are an early adopter and one of the key founders of the new payments platform. While the big  four banks are going very slow rolling out NPP, Cuscal quietly launched more than 40 financial institutions on day one, and did the same with Apple Pay.

Cuscal could see the trends overseas in terms of digital banks and spent a couple years researching international markets. We looked at bringing some of those models to Australia and decided to build a digital bank ourselves. I was involved in the original business case and then moved into the CEO role once Cuscal decided to move ahead with 86 400.

What has the journey been like so far?

Crazy busy!

But there is no other job I’d want, anywhere else in the world than the one I have right now. Building a full bank from scratch is incredibly challenging and exciting. We’ve gone through the process of getting a full banking license and now we are live. It has been an incredible journey so far and an amazing two years. 

Working with our Chairman, Anthony Thomson is an unbeatable learning experience and I am supported by an amazing group of people. We’ve gone from 8 people on day one to now just over 90 people. 

You spent two years building the bank. Now that you are live does it feel like a different business?

The reality is that the build will never be finished. The big difference between 86 400 and incumbent bank is the build. We have daily live releases and new updates to the App every four or five days at the moment. So the product is never going to be finished, we are constantly building. 

But it is very exciting to be live with the product and finally putting it into customers hands. We think 86 400 is a really strong day one offering to customers, but we intend to improve. We have made it our mission to help Australian’s take control of their finances.

Australian’s seem spoilt for choice with new NeoBanks. What distinguishes 86 400 from other NeoBanks? 

I think that’s perhaps the wrong question to ask. The big four banks currently own 85% of the market so we are entirely focused on providing a product that offers a better experience, service and value than the big four banks.

That is the market we want to go after. We see the Big Four as the competition not NeoBanks. 

8 million Australian’s currently bank using their smartphone. Of that 8 million 86 400 is focused on the 25 to 45 year age group (4.6 million) but our youngest customer is 16 and our oldest is 88!

We are giving customers something entirely different, smart banking.

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What is a smartbank?

Before launching 86 400 an enormous amount of research was conducted over two years to unearth and understand the real problem in banking.
People naturally point to the Royal Commission and highlight trust as the problem. Trust is massively important but the real problem we see is this;

Money and our finances are becoming very difficult to manage.

More than 65% of Australians have a relationship with multiple banks. Today we have more money coming in and out of our bank accounts than ever before, which we never see, subscriptions, direct debits and we tap our card or phone more than ever.

It is like money has become invisible. People feel like they are not in control of their spending, making them increasingly anxious about money. 

Our core company value is to help Australian’s take control of their money. So the 86 400 team have designed and built a smartbank that helps Australians take control of their money.

A smartbank is a very different premise and value proposition to the large incumbent banks. 100% cloud based technology, purpose built for people who use their smartphone for everything, banking, payments, applying for a loan etc. 

One of 86 400’s unique features is the ability to link up to 150 other different banks to the App and view your credit card, transaction accounts, savings accounts, personal loans etc. You can see all your finances in one place. It gives customers immediate value when they join 86 400.

That’s what we think will help us compete against the big four banks.

We are extremely happy with the early feedback. There are two measures we are focused on right now and the initial response is very encouraging;

Are customers happy with the product?

And are customers happy to tell other people about the product?

Robert Bell 86 400 Tier One People Interview

Will Open Banking give 86 400 a competitive edge?

We believe that customers should own their data and if a company does hold data it should be used to the customers advantage, not just to sell more products.

Banking has always been focused on the past. A bank statement records what you have already spent, it is too late to do anything about it once you get the statement.  Even with today’s banking apps customers see their statement now, but they are still looking backwards.

Once a customer links all of their bank accounts with 86 400, smart algorithms predict what bills are coming up in each separate account. That’s a massive difference to what we see anyone else is offering in the market and the feature is resonating extremely well with our early customers.

It takes 120 seconds to open an account. You sign up and get immediate value. This is just a small example of what customers can expect from us when open banking really gets going. 

86 400 is one of only two banks to be chosen for the Open Banking pilot program. We are very excited and consider it a huge privilege to play such an important role influencing the future of Australia’s banking industry for the betterment of customers.

But we are not naive, there is a long road ahead and there will be challenges along the way. Not everyone has bought into the benefits of open banking and we are already seeing some resistance as Cuscal witnessed when rolling out NPP.

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How is the team structured?

In total there over 90 staff. Roughly 50% of the team are tech people. Developers, Engineers, Designers, UX and Data Scientists. As a fully licensed bank we have risk, finance and credit functions. The homeloans business is about to go live to the public so we have a full team in that business unit.

The entire team is a mix of highly experienced bankers and highly experienced tech people. We only employ people who are digital natives and passionate about technology. We don’t expect a 30 year banking veteran to become a developer, but you have to be comfortable using technology and be passionate about what technology can do to revolutionise the banking industry. 

What qualities do you look for in people?

Our core company value is to help Australian’s take control of their money. And that principle determines not only the product we are building but the culture we are creating too. Thousands of people reach out to me and the team asking about career opportunities with 86 400.

The first thing we look for are people who can actually do the work themselves. There isn’t the luxury of hiring people whose unique skill is to run a team or focus solely on strategy. We need leaders who can be strategic and actually do the work required to deliver. I appreciate we are looking for a very unique person and skillset.

86 400 operates an Agile environment with a fortnightly showcase where our people stand up and share what they have delivered in the last two weeks. That can be frightening to some people coming straight from a big bank environment. But it’s highly exhilarating for the people we seek to employ, because they get to build stuff without the blockers you get in large organisations.

How have you hired and retained the right talent?

We have a dedicated HR team which is a big help. It’s a very exciting time to be in the industry. Our people are genuinely passionate about changing banking for the good of customers. 86 400 is small, we have a very flat structure so there is much greater ability to influence outcomes for those who are prepared to roll up their sleeves and Get Things Done.

We are a technology business first. But right now we don’t have the room for bean bags and a table tennis table. We don’t see the need for an innovation hub because if the innovation isn’t happening around the boardroom, then 86 400 has a BIG problem.

It is reassuring for me as CEO to see the team stay here because they feel the work they are doing is important and has meaning. And not stay here because we have beer pumps and table tennis. The whole team shows enormous pride in the work they are doing. 

Success is celebrated as a team. When the first home loan was finalised, when we got our license, when we went live with the core banking system, when the first card transaction with an ATM happened. All of these milestones have been celebrated as a team. 

There will be lots more to celebrate over the next few months. The homeloans product goes live to the public soon. The biggest celebration for me is the feedback we get from customers every day. It’s so rewarding to know that 86 400 is truly delivering on our core principle of helping Australian’s take control of their money.

Martin McCann – Trade Ledger

2019 was a breakthrough year for Trade Ledger. 2020 promises to be even bigger as open banking creates the perfect set of conditions for the Trade Ledger platform to take off.

Dexter Cousins of Tier One People caught up with CEO and Co-Founder Martin McCann in Sydney recently to talk open banking and Lending as a Service.

 

What kind of FinTech is Trade Ledger?

Trade Ledger is a banking platform technology designed to help banks and large non-bank lenders provide any type of credit to businesses and corporations around the world.

We have built a global platform, technology which can be instantly deployed in any country. Matt Born (co-founder) and I come from Enterprise Technology backgrounds. Trade Ledger came into being because we both wanted build what we call a ‘true platform’. We see a lot of FinTech’s claiming to provide platforms which in our view are nothing more than technology stacks for a specific product. These are not true industry platforms.

Enterprise Software, which is essentially what we do, is one of the most complex and difficult markets in business. We’ve been building Trade Ledger for a market which didn’t even exist when we set up the company. Globally the market we operate in is estimated as a $4 Trillion opportunity. Just the undersupply of credit for businesses globally is $2 trillion. That is the extent to which businesses are underserved with lending and capital. We call it ‘Lending as a Service.’ Nobody used the term when we set the business up two-and-half years ago.

 

Can you tell me how LaaS works?

Essentially LaaS is the outsourcing of the IT and operational requirements for the bank when it comes to lending. Typically, for a business to apply to a bank anywhere in the world for a line credit the average time to process the application is 90 days.

There’s about 30 hours of manual work for the customer plus 300 emails and 500 calls involved.

Trade Ledger eliminates the manual processes using API’s and accessing the banks data, completing the whole process in four minutes without a single document filled out.

 

What do you attribute to your success so far?

Matt and I followed our own path when we started the business. Trade ledger was incorporated in August 2016 and we were supremely confident we were building the right solution at the right time for the right market. Joining forces is the first thing we got right. What Matt, the team and I are doing is really, really hard and you need at least two co-founders to tackle all of the challenges ahead.

The combination of us working together has proven to be a real positive for the company and our personal lives. Matt and I both have extensive experience in enterprise software. We both worked at SAP and we witnessed software disruption in other sectors, it was only a matter of time before the same would happen in banking.

The blueprint was already there from other industries, it was just a case of applying the strategy to the right niche. Forming our partnership, our timing and product market fit are the keys to our success so far.

Discover your next challenge – https://tieronepeople.com/jobs-in-fintech/

Can you tell me more about the Trade Ledger business?

The business is now over 20 people, evenly split between London and Sydney. We’ve almost doubled the size of the company in the last three to four months. We are delighted with the ‘firepower’ we have hired into the business.

Firstly, we managed to find really high calibre senior engineers, the kind of people we think are potential game changers. In London, we’ve hired a CFO who is highly respected in the VC community. He will help turbo charge the growth of the business. We are embarking on Series A funding, having a CFO of the calibre we have is essential.

All this adds to the great talent we already have.

We don’t want a development center, and operational offices, we’re trying to keep uniformity across the offices. Fundamentally I believe three things will give Trade Ledger long-term differentiation, in the market-place.

The people in the organisation

The culture of the organisation

And what I call the velocity, are we moving fast enough in the right direction?

I don’t know if we are moving fast enough in the right direction yet, but we are accelerating.

 

What makes the culture of Trade Ledger unique?

The culture is very important to us. Matt and I have almost identical values and business ethics. Transparency is key to us, in terms of our business relationships and our people. We firmly believe when you’re trying to grow something this new, this quickly, you are going to break things, frequently.

It’s what you do when you realise you’re going in the wrong direction, or you’ve broken something which counts. And recognising which things you can break and what you absolutely have to get right.

Living by this ethos creates a culture of high performance which is the edge for a company like ours. Frankly, the banks struggle to attract the kind of people required for a high growth, exciting tech startup like Trade Ledger.

So, banks will have to partner with Fintech’s to access the talent, innovation and execution required for this next paradigm of business we are entering. Big organisations just cannot achieve the velocity required to keep up with the pace of innovation today.

 

What do you look for in the people you hire?

Primarily values and attitude. We don’t focus on people’s experience or their background, we focus on whether or not they would fit well with the team or will they be disruptive in the team. We love diversity. It does cause some challenges. The nature of diversity means it’s harder to evaluate how someone will fit, in the context of values and ethics.

And then the other thing we look for is high potential or high propensity for success. What we’ve found is interesting. People who are under-experienced, properly motivated and show high potential are a much better fit for this organisation than people who’ve got proven experience.

People with high potential fit our culture and the way we work. They want to get ahead quickly, they appreciate the opportunity to be able to contribute and to learn. And they understand the value it creates for them as an asset that differentiates them in the market.

 


 

Trade Ledger

 

 


 

What prompted your move to London?

A good question. Can I say, it’s really nice to be back in Sydney in the heat. From our perspective, Sydney is a great place to start a company. There’s a lot of benefits to be found in the FinTech ecosystem but there are limitations.

The market itself is relatively small, compared to other markets globally. With our ambition to be a global software company, we don’t see significant market penetration in Australia. Banks in Europe and North America don’t see Australia as a market with enough scale, so it is difficult to get credibility as a global player being based from Sydney.

Why choose London? After some consideration and research, the legislative changes in Europe and open banking in the UK made London the ideal launch pad for the Trade Ledger platform.

There’s massive investment from the banking sector in open banking technology, which from our perspective, is just API-based platform technology. The most innovative global bank transformation programs are happening in London. Lloyds alone has five transformation programs running, which, have a multi-year program budget of over 2.5 billion pounds. That’s the scale of transformation technology that’s happening in Europe and it’s hard to find anything comparable happening anywhere in Australia.

If we want to be a global company, we have to win the European market and more specifically the London market. Open banking, GDPR and other legislative changes have created a seismic shift to data-driven lending in the business bank and SME funding market-place.

 

The UK is now 12 months into open banking. What are the potential opportunities here in Australia?

The UK market has been really interesting, and for us, it’s great to have a ring-side seat to the first real implementation of open banking.

Year one was all about fixing the problems with the original scope, specification and approach to open banking. It went live late and there were a couple of issues with the implementation.

The challenge is shifting a heavily regulated market to a technology-driven business model in a record amount of time, it’s never been done before. All of the interested parties are struggling to keep up.

The regulators are finding it particularly difficult to figure out what to do when things go wrong. Liability, specifically the daisy chaining of liability and how to manage it, is turning out to be a significant problem. I think everyone has underestimated how big a shift this was going to be.

Discover your next challenge – https://tieronepeople.com/jobs-in-fintech/

What can Australia learn from UK Open Banking?

Australia being number two into open banking is perfectly positioned to come up with the best capability in the world. It is a highly ambitious plan to implement open data across all industries. Conceptually this is where the market needs to go to.

The Australian market has perhaps underestimated the difficulty of implementation challenges. Something of this scale needs a very strong governance process. It needs to have a very, very high degree of consultation with all of the stakeholder groups.

My fear is the original scope could be thwarted, and open data never actually achieves the ambition outlined in the original agenda. Specifically creating competition in banking.

I wrote an article outlining my fears, published in the AFR. From the feedback I received, maybe people misunderstood my intention. I do not advocate any particular solution, Trade Ledger will prosper regardless of what Open Banking journey Australia chooses. I feel strongly that we need to have the right discussion about the national interest, because this is a once-in-a-generational opportunity Australia can’t afford to get wrong.

If Australia gets open banking right, it is my firm belief we can export financial services to other countries on a scale rivalling the mining industry. And if we get it wrong, then the opposite is true. Digital financial services does not observe national borders. Regulation, which once protected national markets has now become a grey area.

 

What does the future hold for Trade Ledger?

We are in advanced discussions with significant global banks. It is a distinct change in strategy for us. There is a much higher risk involved and a lot more investment up front.

If Trade Ledger is to become what we intended from day one, a global top three in the category, then it’s the direction we need to go in. We don’t shy away from risk or challenges, we embrace them, and we work harder, faster, and smarter to try and move in the direction we want to go.

 

Discover your next challenge – https://tieronepeople.com/jobs-in-fintech/

Matt Baxby Revolut CEO

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