Incubating a New Australian Bank*

Novatti’s ambition is to deliver personalised financial products and services for new Australian residents - permanent and temporary - and support the cultural and lifestyle expectations of different customers as they prepare for and start life in Australia.

The transformation of the Australian banking sector has provided the impetus for the incubation of Novatti IBA as a result of:
  • New disruptive customer-centric and purely digital business models;
  • The Australian government opening up the tightly held banking sector;
  • Fall-out from the high-profile Banking Royal Commission (2019); and
  • Changing consumer expectations – they are increasingly disenchanted with the low level of value offered by traditional banking players.

Changes in Australia’s demography attests to the unique market opportunity available to Novatti IBA. Australia now has over 7 million foreign residents – 29 per cent of the population. Australian migration is forecast to keep growing and outstrip organic population growth. Asian migration accounts for nearly 2.4 million residents today, and temporary migration has doubled in the last decade to approximately 1,500,000 temporary residents per annum.

The Novatti IBA team is alert to the many challenges new residents face in moving to Australia, and the cultural nuances and lifestyle expectations of different customer segments. Novatti IBA will provide a single point of integration for new residents to access a wide range of financial products and non-financial support services before they arrive in Australia. These services will not exist in a vacuum – they will be part of a larger ecosystem tailored to the new resident experience.

Novatti IBA has brought together a team of banking experts, digital specialists and leading technologists. The majority of the team, including local team members in India and China, are from different cultural backgrounds, are experienced in dealing with new resident ‘pain points’, and understand cultural nuances and preferences.

Novatti IBA is innovative, scalable and commercially pragmatic, and will ensure a low-cost customer proposition can be offered and maintained for existing and future customers. The operating model has been developed to optimise security in relation to customer data and customer privacy; ensure regulatory compliance; support customer engagement across multiple languages and dialects; and deliver personalised products and services.

Novatti IBA has made an application for a Restricted Authorised Deposit-Taking Institution (RADI) licence from the Australian Prudential Regulatory Authority (APRA). Novatti IBA is developing and trialling a number of products for different customers which will inform Novatti IBA’s final system and processes. Novatti IBA will broaden its product set to include more sophisticated liability products, a full suite of loan-related products including trade finance, as well as cross-border payments and correspondent banking services.

* IBA is being developed by Novatti. Neither Novatti or any related body corporate of Novatti is a "bank" or conducts a banking business. Novatti IBA is not a bank and cannot conduct any "banking business". This entity has applied for a Restricted ADI licence which would enable it to become a bank and to conduct a banking business. This application is pending.

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