New strategic partnership means Novatti’s banking business will hit the ground running
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As it prepares to launch a new banking business, fintech Novatti Group has gained a valuable ally with a new partnership with an international financial services provider.
Novatti Group (ASX:NOV) has partnered with BC Investment Group Holdings, an international financial services provider with over $1.1 billion in mortgage loans and over 3,800 customers.
BC Invest will partner and invest in Novatti’s dedicated banking subsidiary, Novatti B Holding Company, acquiring a 19.9 per cent stake in the company, as well as investing $3 million into Novatti directly.
“Importantly, BC Invest brings strong industry expertise, particularly through their existing lending operations, as well as new customer acquisition channels, which will help Novatti’s new banking business bring income generating products to market quickly,” managing director Peter Cook said in an email to shareholders.
Other Australian neobanks have run into trouble because they attracted deposits by advertising higher interest rates than the Big Four banks offered – but had no lending products that allowed them to make money from those deposits. This appears to be something Novatti is planning to avoid and an area which Australian regulators have said is a priority.
Judo Bank, which launched in 2018, has been quite successful by focusing on lending to small and medium sized businesses. A recent funding round valued Judo at $1.6 billion.
Novatti is working with the Australian Prudential Regulation Authority to act on its application for a restricted banking license, a submission that was delayed last year because of the pandemic.
“Developing this new banking business remains a key pillar of Novatti’s long-term growth strategy”, Cook said.
This article was developed in collaboration with Novatti Group, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.