Frollo & EML launch Nuapay – a revolution in Open Banking

Frollo is excited to announce their partnership with EML, a global leader in payments technology, to launch Nuapay – a revolution in Open Banking.

They have combined forces with EML to help lenders and FinTechs access the latest in payments, PFM and Open Banking technology through a new digital wallet product.

Clients can choose between a no-code (white label app), low-code (SDKs) and fully customisable API solution to get access to features like:

  • Instant cash: Using Open Banking data and virtual prepaid cards, the process to approve and disburse a loan is reduced from days to just minutes, eliminating costly and highly manual human-led checks with traditional providers.
  • Money management: A market-leading banking app, including personal finance management features.
  • Emergency buffer: The ability to quickly go back and turn a transaction into an instalment loan.
  • Spend controls: Using AI transaction categorisation to control spend in real-time and place budget caps for specific money buckets.

Learn more here.

Regional Australia Bank joins FinTech Australia as an ecosystem partner

Customer-owned financial services company, Regional Australia Bank will support fintech ecosystem events and policy initiatives as the latest FinTech Australia ecosystem partner.

The company joins the ranks of Newcastle Permanent Building Society, IDEMIA, Google, eftpos, Amazon Web Services (AWS), Mastercard, EY, Facebook, many of whom signed partnerships with FinTech Australia within the past 12 months.

“Our partnership program allows us to continue to grow our support services for the Australian fintech ecosystem, which at last count is over 700 companies strong,” FinTech Australia CEO Rebecca Schot-Guppy said.

“We’re excited for the regional lens and perspective Regional Australia Bank will bring to our community offering and our policy work.”

Regional Australia Bank Chief Digital Officer Rob Hale said “Our established relationships with Fintech Australia members including Basiq, Douugh, Cloud case, and more recently Biza, have already created incredible strategic value for us and our customers.

“The opportunity to formalise our connection with Australian Fintech through this partnership is a natural progression, and something we’re really excited about.

“We now also look forward to being able to add our ‘fintech-friendly bank’ voice to important ongoing policy consultation work, particularly in the field of open data and the Consumer Data Right.”

The FinTech Australia partnership program helps embed these companies within the fintech ecosystem and networks them with its key players.

Media contact

Harrison Polites
harrison@themediaaccelerator.com.au

0409 623 618

About Regional Australia Bank

Regional Australia Bank Chief Digital Officer Rob Hale said “Our established relationships with Fintech Australia members including Basiq, Douugh, Cloudcase, and more recently Biza, have already created incredible strategic value for us and our customers.

Member Spotlight: Binance

2021 has been an extraordinary year for the cryptocurrency market; with coins like Bitcoin, Ethereum and Binance coin all reaching record prices that have not been seen before. Decentralised finance, also known as DeFi, has seen record highs with the US dollar value of Ethereum locked in DeFi contracts being around $40 billion as of March 2021. This dollar amount has grown from $674 million since January 2020. Central Bank Digital Currencies (‘CBDCs’) have also seen increased attention as the world economy reels from the effects of the pandemic.

For this week’s Member Spotlight, we caught up with Jeff Yew, CEO of Binance Australia to chat about his views on the recent explosion of DeFi and CBDCs, as well as the trajectory of Binance and its recent fully fledged entry into the Australian market.

“The progression of cryptocurrency and digital assets is inevitable as the world continues to progress digitally,” says Jeff. “Most of the world’s money is already digital, but they come in different forms: some government backed, some backed by other assets like gold. Bitcoin and cryptocurrencies have a very important difference because they are open-source and transparent. They are the freest and most censorship resistant form of digital money that the world has ever seen. That itself gives digital currencies like Bitcoin a unique advantage against other government-backed digital money, like CBDCs. Each having their own pros and cons, but the difference now is that people get to choose what’s best for them.”

CBDCs are digital currencies that are backed and issued by a country’s central bank. An increased interest from the retail market, paired with the economic pressures of the COVID- 19 pandemic has prompted Central Banks all over the globe to consider the implementation of Central Bank Digital Currencies. In a September 2020 paper, the Australian Reserve Bank concluded that while there does not seem to currently be a strong public policy case for the issuance of a CBDC in Australia, the RBA will closely watch the experience of other jurisdictions that are considering the implementation of CBDCs. The RBA also announced a partnership with CBA, NAB, Perpetual and ConsenSys on a wholesale Central Bank Digital Currency Research Project in November 2020 with further research released in the RBA’s Payments System Board Update in February 2021. If you’re interested in reading more about CBDCs, we’ve covered the topic in more detail in a previous Member Spotlight.

 

The Advent of Decentralised Finance

2021 has also been a huge year for DeFi, no doubt prompted by current world events. DeFi is crypto’s answer to traditional financing and lending products, allowing the lending of assets without a middleman.

Most DeFi applications are built on top of Ethereum and Binance Smart Chain with DeFi covering areas such as decentralised exchanges, stablecoins, lending and financing, wrapping crypto-assets to allow for interoperability between crypto such as bitcoin and DeFi, and betting markets.

Lending is by far the most popular use case for DeFi, allowing users to borrow cryptocurrencies, or lend their own to others. Users that lend their cryptocurrency earn interest, and users that borrow cryptocurrency must post collateral. The significant difference between DeFi and traditional lending is that DeFi doesn’t require Know Your Customer checks. This risk,as well as other risks such as market volatility, is often countered by an overcollateralization when borrowing, as is the case in platforms such as Maker DAO.

DeFi lending could not exist without stablecoins, which are cryptocurrency alternatives to traditional fiat currencies. Stablecoins peg their value to a fiat currency, such as the US Dollar, and act as a stable asset to transact with.

Jeff noted that, “Bitcoin is often likened to Gold in that it is a strong store of value but potentially lacking as a means of facilitating regular transactions. For DeFi to function properly, the community needs a way to price products and services that is recognised by everyone and isn’t fluctuating the way Bitcoin might. That’s where stablecoins come in. And equally importantly, the community must continue to work together with regulators to ensure the advent of blockchain and crypto hold benefit for all involved.”

Many users are attracted to the DeFi market due to Yield Farming. Yield Farming is similar to staking, except Yield Farming does not facilitate a consensus mechanism. Instead, it serves as an economic incentive for users to fund a liquidity pool. A liquidity pool is the pool of funds within a DeFi platform that enables the movement of cryptocurrency within a DeFi platform. Upon committing crypto to a liquidity pool, those users are often rewarded with that platform’s governance token, which can be used either within the platform (often to cast votes in its governance mechanism) or sold on the open market. Think of it as a form of interest generated as a result of your deposit into the liquidity pool. These tokens that are granted to users generally only carry a speculative value, but some, such as Uniswap, have gained significant value. While the current boom is reminiscent of the Initial Coin Offering (ICO) craze in 2017, a considerable difference between ICOs and DeFi, apart from the far more mature ecosystem and market, is that ICOs were typically sold on the basis of nothing more than a whitepaper; a promise, while DeFi projects are generally live and functioning systems.

“We’ve seen in a short period of time DeFi open up a range of alternative opportunities for those interested in the space to not just grow the value of their money, but also contribute to the development of DeFi and crypto in a meaningful way”, says Jeff.

 Binance Australia is at the forefront of all things crypto, being a considerable supporter of the DeFi space, particularly in a COVID-19 impacted economy.

 “We’re seeing an increasing number of members of the crypto community look to DeFi opportunities as a way to sustain themselves financially which is fantastic because these opportunities were non-existent five years ago. And in a time where employment, high-interest accounts and traditional income streams have been difficult to come by, it has really highlighted the value DeFi potentially offers. At Binance Australia we are committed to grow the level of education available to the public as well as working with regulators on an ongoing basis to facilitate the growth of crypto in all its facets in Australia.”

COVID-19 has not only been a catalyst for crypto-market growth, but also for how a business pivots in a new digital age. Binance Australia has had an established presence in Australia since early 2019 in the form of Binance Lite Australia and have been actively engaging in local communities through meetups, panels and events. However, COVID-19 forced the Binance mid-2020 launch to become more digitally focused. “Staying close with our users is a challenge in times like these. We’ve switched physical meetups to virtual ones and hosted more regular AMAs throughout our online channels than we did before. But the good thing is that we’ve been able to engage with our users and community more,” said Jeff. “We have a lot of activity planned in the Australian market, including a series of free online courses to help guide beginners into the crypto space safely, and also more advanced content for veteran traders and startups looking to build cool applications within the ecosystem.”

Jeff wrapped up with an update on how Binance is doing in Australia, “We’ve recently revealed our Australian centric homepage, based on the great feedback we have received from our community. The new homepage is beginner-friendly and features quicker access to the features our users love. Be sure to check that out at binance.com/en-AU.”

Credit enquiries full steam ahead – but where’s the tipping point?

Credit enquiries are at their highest levels in 18 months, according to the latest CreditorWatch Business Risk Review. This indicates business conditions are normalising as companies begin trading at pre-COVID levels.

Other data, including higher than expected economic growth of 3.1 per cent in the December quarter and a falling unemployment rate, also indicate Australia’s post-COVID economic recovery is both sustainable and in full swing.

Nevertheless, the end of government measures such as JobKeeper that artificially supported the economy during the worst of the pandemic is yet to take effect across the broader business sector.

Positive signs ahead

According to the March CreditorWatch Business Risk Review, growth in credit enquiries has been accelerating over the last six months whilst debtor court cases have bottomed out over the same period.

“While the number of external administrations rose in early 2021, on an annual basis these have now fallen over thirteen consecutive months. The average number of external administrations over the last six months is fourteen per cent lower than for the six-month period to September 2020,” said Mr Patrick Coghlan, CEO, CreditorWatch.

“This is a metric to watch given the economic forecast for 2021. We expect to see a rise in the number of administrations, especially with JobKeeper having come to an end,” he adds.

Payment default figures on the up

In line with administration figures, payment default numbers are also on the rise, increasing by 13 per cent in the March 2021 quarter.

“The number of payment defaults has fallen for the past five consecutive months, which gives off conflicting signals. With government stimuli recently ending, we’ll be watching closely as we enter a post-JobKeeper economy to see how this changes,” Coghlan says.

Defaults: Industry deep dive

CreditorWatch recently crunched the numbers around the likelihood of defaults among different industries. Defaults suggest a business is in financial stress and complement trends in administration figures.

“Construction is one industry worth calling out when it comes to the upcoming propensity for default,” said Mr Harley Dale, Chief Economist, CreditorWatch.

“The number of administrations in this sector fell from 24 per cent of all insolvencies in the December 2020 quarter to 15 per cent of all insolvencies in January 2021, with a probability of default of 4.49 per cent,” he said. This indicates payment conditions in the construction sector have improved, with the industry still being supported by the $25,000 homeowner grants.

Across the board, there is a low probability of default, with businesses in the healthcare and social assistance, arts and recreation services and agriculture, forestry and fishing sectors among the least likely to default. Transport, postal and warehousing, public admin and safety and professional scientific and technical services are among the industries that are most likely to default.

Best and worst performing sectors for payments

Sectors where payment times are improving include:

  •  Manufacturing (-15%)
  • Electricity, gas, water and waste services (-28%)
  • Retail (-23%)
  • Accommodation and food services (-57%)

Sectors where rising payment times are a concern include:

  • Healthcare and social administrative assistance (+140%)
  • Administrative and support services (+49%)
  • Construction (+29%)
  • Professional, scientific and technical services (+25%)

What’s the outlook?

Overall, expect voluntary administrations, court cases and default numbers to continue to rise next month as the withdrawal of government stimulus measures starts to reveal its true impact on the economy.

Data are accurate as of April 1 2021. ASIC data subject to change.

Media Release: AFIA’s Buy Now Pay Later Code of Practice Comes Into Effect

The Australian Finance Industry Association (AFIA) is pleased to announce that its Code of Practice for the Buy Now Pay Later (BNPL) sector has come into effect today. (more…)

Five FinTechs on Friday – July 31

This Friday we cover fintechs that can support your business – streamlining capital raising, lending for SMEs, financing for businesses, executing payments for SMEs and managing account receivables.

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Member Success

Fintech continues to grow. Companies in our sector continue to build, hire and serve as a shining example for the government on just how resilient our sector is. A snapshot of our members’ success can be seen below.

As the industry’s peak body, we serve a much broader role than as an industry champion. Working with the board, we have developed three new pillars which will guide our future activities. They are:

Advocate and promote: FinTech Australia will continue to advocate for members in public forums and with policy makers. We will also continue our work promoting the ecosystem and all of its players as broadly as possible.

Engage and connect: Engage directly with members and with relevant partners for the ecosystem and help connect our members where possible to strengthen their growth.

Grow: Strengthen our ecosystem and community, and build awareness of it both locally and internationally. (more…)

Member Spotlight: Wisr, Purpose-led lending

Anyone can tell you that the first step to developing a successful fintech business is to identify a problem that needs to be fixed or fill a niche that needs to be filled. However, you need to go beyond the immediate and think about the longevity of your business. What differentiates businesses in the market, particularly in areas such as lending, is that purpose is king.
(more…)

Five FinTechs on Friday – July 10

 

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Another cracker week with two fintechs focusing on consumers financial well being with free credit score check and dynamic cash flow modeling. Other fintechs help with monitoring an organisation’s resilience through analytics, retrieving and categorising bank data. And lastly an experienced fintech in subscription and recurring payments that has expanded internationally.
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Five FinTechs on Friday – June 19

We highlight five fintechs this Friday that provide solutions in cross-border payments, helping consumers finance their energy requirements, digital currency payments and transfers, open banking, and intelligent digital wallets. Below are the five fintechs in Australia that you need to know about.
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Upcoming Events
  1. Intersekt 2021

    May 19 @ 9:00 am - May 20 @ 6:00 pm
  2. Finnies 2021

    June 9
Videos

Ep 2: Fintechs Acceleration of Growth Since COVID

Ep 1: The Evolution of Payments

Scaling Product Globally

Podcasts

Lee Hatton – Afterpay: FinTech Australia Podcast

Anthony Jones – Visa AUS/NZ

Tim Cameron – TransferWise