Alex, the neighborhood’s new Australian neobank, launches collaboration with Temenos
The news: Australian neobank “Alexis” left live on Temenos software as a service (SaaS) Cloud banking Temenos. Earlier this month, Alexis has received its RADI (Restricted-Authorized Deposit-Taking Institution) license from the Australian Prudential Regulation Authority (APRA).
More on this: Currently, Alex’s only offer is for personal loans between 2,100 AUD ($ 1,444.84) and AUD $ 30,000 ($ 20,640.52), with repayment periods ranging from six to 60 months.
Temenos’ press release claims that its technology has enabled it to process approximately 10,000 loans within the past six months, and complete each application by three minutes.
Alex plans to roll out a wider range of savings and loan products in the future. Temenos noted that its preconfigured Australian Model Bank methodology would help it do this quickly.
The overview: A recent contraction of the neobank retail environment in Australia has forced the exit of two neobanks aimed at consumers, leaving room for new entrants.
- From 2018 to early 2020, four budding neobanks held banking licenses and positioned themselves as alternatives to the country’s incumbent operators.
- The pandemic and economic headwinds finally forced Xinja To shutter in December, and 86,400 accepted to be acquired by National Australia Bank in February 2021.
- Two of the four originals remain—Volt and Judo-but Volt has rotated towards bank as a service (BaaS) and mortgages, and judo is SME centric.
The result is a shortage of neobanks aimed at consumers in Australia, partly on purpose, as the Australian Prudential Regulatory Authority (APRA) has worked to Stiffen its requirements for neobanks seeking full banking licenses. (Alex currently has a restricted license and will need to do a limited launch of a depository product to get a full license.)
The open space gives Alex the opportunity to quickly grow his client base once he begins to expand his offerings. Its main competitor will be At the top, including the parent bank, Bendigo and Adelaide Bank, provides it with a license.
Another tailwind for Alex is that his first product, loans, is making a profit. One of the main causes of the downfall of 86,400 and Xinja was the expensive and generous high yield savings accounts that took their first steps in the market. A revenue-driven approach could put Alex on a path to long-term sustainable growth.