Fintech stays on the march as ASX non-bank lenders and financial wellness apps build market share

Competition among Australian lenders has reached new heights, fueled by a boom in new entrants as non-bank fintechs continue to outperform traditional lenders.

According to AUSTRAC, there are now over 600 non-bank lenders and financiers in the Australian market.

And non-bank lenders’ loan books are growing as they try to disrupt the sector with low interest rates and quick approvals.

ASX listed Harmony (ASX: HMY) is the youngest non-bank lender to report a record increase in its loan books.

The final quarter saw record new customer numbers, with new customer acquisition in Australia rising to $ 31 million, a massive 885% year-over-year increase.

Harmoney’s total loan portfolio is now just over half a billion dollars, and it is already breaking even NPAT cash on a pro forma basis.

The New Zealand-based company is hiring a team of data scientists and engineers to develop artificial intelligence (AI) -based technology that enables its Libra end platform to automate loan approval.

“This technology expands our ability to deliver financial products to more Aussies and Kiwis without additional customer acquisition costs,” said David Stevens, CEO of Harmoney.

Another fast growing fintech lender that also had a record quarter is Plenti Group (ASX: PLT).

Plenti’s lending book grew 140% year over year to a record $ 256.4 million in the second quarter.

The total loan portfolio is now $ 915 million and is well on track to meet the $ 1 billion target by the end of this year.

“Our growth is broad-based. I think it’s really representative of we’re gaining market share, ”Plenti CEO Daniel Foggo told Stockhead earlier this week.

He said that large incumbents like banks are struggling to keep up with customer needs, and this provides an opportunity for more nimble fintechs like Plenti to crowd them out and gain market share.

The rise of financial wellness apps

Another segment that is growing rapidly in the fintech sector is financial wellness platforms.

New data, revealed in a Backbase study commissioned by Forrester Consulting, shows that the Australian banking sector is transitioning to making full use of digital financial wellness tools to attract and retain customers.

Asia Pacific regional vice president for Backbase, Iman Ghodosi, said digital money management and financial wellness apps are no longer a gimmick – as neobanks, fintechs and disruptors have shown.

“We’re not far from the fact that these apps are the most important interface between banks and their customers in the entire sector,” said Ghodosi.

He said we have entered the “Engagement Banking Era,” a development that emphasizes a unified platform approach to banking.

Ghodosi, once the realm of smaller fintech companies, believes the big banks are now starting to take advantage of financial wellness apps.

“You can see that fintechs and neobanks had a head start,” said Ghodosi.

“There is also a lack of understanding within the old institutions (big banks) who owns the budget for this type of initiative.”

This confusion has enabled fintechs that offer financial wellness apps like Dough (ASX: DOU) to grow quickly.

Although the main market is the US, Douugh has also begun dealing with the Australian market with the acquisition of the Goodments business, now renamed the Goodments by Douugh App.

Founded in Australia in 2017, Goodments is a leader in responsible investing, bringing ESG conscious people together with stocks and ETF investments that match their values.

DOU shares continued to surge from recent lows this morning after the company announced a collaboration with U.S. company Zero Hash to integrate a cryptocurrency wallet and trading functionality into the Douugh app.

Share prices today:

At Stockhead, we say it as it is. While the Plenti Group is a stockhead advertiser, it did not sponsor this item.


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