MONEYME is at the forefront as Australian financial firms scramble for a technological edge over their peers
As one of Australia’s only fintechs to have built its proven and proprietary technology from the ground up, MONEYME is leveraging its technology leadership to create business advantages and become a powerhouse in the Australian financial lending space.
MONEYME (ASX:MS) is positioned to be a major player not just in Australia’s fast-growing fintech lending industry, but across the lending industry as traditional lenders scramble to catch up to its technology capabilities.
Fintech lender co-founder, MD and CEO Clayton Howes says many traditional banks and lenders have been left behind when it comes to embracing technology for the modern financial world, and are now paying big money to become more tech-enabled.
“NAB bought Neobank 86,400 for a good amount of money just to leverage its technology and innovation,” he said.
He said another example is consumer finance company Latitude Group, which paid Symple $200 million in 2021 again just for a bit of technology.
The acquisition of SocietyOne puts MONEYME in a leading position
In March this year, MONEYME completed its acquisition of digital lender SocietyOne, bringing a step change to its $1.2 billion loan portfolio.
But while incumbents are acquiring fintechs to capitalize on their technological capabilities, MONEYME is using its own innovation to flesh out SocietyOne’s offering.
Howes said MONEYME had taken a major step in post-acquisition integration with SocietyOne, which enables the technology, on its proprietary Horizon technology platform.
Less than 6 months after the $132 million acquisition, SocietyOne loans are now issued through Horizon.
“SocietyOne’s customer experience is now powered by MONEYME’s technology, which is quite remarkable given the recent acquisition. But that’s the beauty of having your own high tech,” Howes said.
“Some acquisitions take years to deliver technology-driven results, but when you have the kind of technology we’ve built, which is microservices-based technology, you can go incredibly fast.”
He said for the first time in SocietyOne’s history, customers can get a loan approved and money deposited into their bank account in less than an hour.
“We’ve taken the inefficiency out of what used to be a 24-hour process. On the second day live, we created SocietyOne loans in 34 minutes,” he said.
MONEYME executes its profitability strategy
Howes said the company over the past year has shown it can generate both organic and inorganic growth. The group has now turned to profitability to build resilience in a world of higher interest rates.
“MONEYME was profitable for four consecutive years from 2017 to 2020, before entering hyper growth mode,” he said.
“We have quadrupled our business over the last fiscal year and have built significant scale advantages that we can now leverage to get back to statistical profit generation.”
Howes said removing human inefficiencies in traditional processing will help the company deliver on its promise to shareholders to return to statutory profitability and achieve more than $200 million in net revenue for FY23.
“There aren’t many companies that are statutorily profitable in our industry because they’re all trying to grow without operating as efficiently as they could if they had the right technology capabilities.”
Solid alternative to bank credit
Howes said MONEYME has found a niche with the underserved market of consumers who want to access credit products efficiently and are willing to use alternatives to banks.
In this way, MONEYME has captured a digitally savvy young audience in their financial journey. He points out that when the company was founded in 2013, the average age of customers was around 23.
“Nine years later, the average age of our customers is around 32. So they’re the same customers,” he said.
“We stayed relevant to them by leading the way with a digital-first approach that has now become mainstream.
“This is a customer demographic that is prime for credit card, personal and auto financing, and almost ready for mortgages,” he said.
Get higher credit scores
Howes said the credit profile of its loan portfolio is changing by design, as MONEYME targets customers with higher credit ratings.
“Equifax’s average profile of our loan portfolio is now 711, and the portion of our loan portfolio with a score below 600 has dropped significantly,” he said.
“600 is still a good score when dealing with a younger demographic with less time to build a credit history, but that’s now only 19% of our portfolio, down from 36% a year ago. a year.”
Step up a gear
Autopay continues to be a priority for the company as it prepares to unlock opportunities in the auto finance market through strategic partnerships and new product innovations designed to transform the shopping experience of a car for consumers.
“Banks have clearly shown their hands and want to protect their mortgage books, which gives us a ton of space in the critical auto finance industry,” Howes said.
“Banks are getting out of auto financing and in a single year we’ve grown Autopay from a few million to half a billion loans, which is phenomenal.”
Howes also thinks the auto finance niche is fairly well equipped to weather rising interest rates.
“Some of the rate increases we’ve passed on to the client mean that a $30,000 car loan only resulted in a $30 increase in monthly payments for the client. So it’s not the same as raising the rate of a mortgage, which can have a significant impact on people’s cost of living and purchasing power,” he said. .
This article was developed in conjunction with MONEYME, a Stockhead advertiser at the time of publication.
This article does not constitute advice on financial products. You should consider obtaining independent advice before making any financial decisions.