Special Report: The digital bank is Australia’s newest and the only one that focuses on providing bank guarantees to small businesses and landlords.

Avenue Bank has been given the official go-ahead from the Australian Prudential Regulation Authority (APRA) to operate as a full-fledged bank.

Bank guarantees are a significant pain point for Australian SMEs with the current process slow and cumbersome and often taking up to six weeks. Avenue Bank aims to change that by offering a quick and hassle-free digital solution including a turnaround time of 24 hours.

Avenue research shows that 29 per cent of businesses have had to defer an office move and a further 46 per cent have had their moves disrupted because of the process of obtaining a bank guarantee.

Avenue CEO Peita Piper said the bank had reinvented the bank guarantee, providing fast, fair, and fuss-free service to Australian businesses.

“Australia’s banking landscape has evolved, yet the bank guarantee market remains stagnant, burdened by outdated, paper-based processes,” Piper said. “Small businesses are stifled by unnecessary delays, uncertainty, and financial strains.”

Now, Avenue Bank has its sights set on a $9 billion market. That’s the total amount of deposits held under bank guarantees for tenants renting from commercial landlords. Avenue would cover its costs by capturing just two per cent of this market.

Avenue’s digital solutions streamline the management and claims process for landlords while enhancing security measures to mitigate risks of loss, theft, or fraud. Notably, tenants stand to benefit from a fully digital origination process, marking a significant departure from traditional practices.

Current Avenue customer, Tank Stream Labs CEO Bradley Delamare, lauded the bank’s innovative tech solutions, highlighting the inefficiencies of traditional processes.

“I went through the traditional bank guarantee process, which was painful. Not only did I have to obtain multiple signatures for multiple documents, but I also had to hand deliver them to the bank’s head office. In the 21st century, surely there’s a better way,” Delamare said. “It feels like we’re in really good hands with Avenue Bank.”

Avenue is also targeting customers including big leasing agents like Colliers and CBRE, large commercial landlords such as Dexus and Mirvac, and tenant advisors like Franklin Shanks.

Avenue Bank says it offers competitive interest rates to customers on their security deposits, which are 100 per cent government-guaranteed (up to $250,000 per account holder). As an added incentive, the bank has announced the waiver of application fees for a limited time.

“This is only the beginning for Avenue,” Piper said. “We are committed to delivering further innovation to the bank guarantee market.”

 

This article was developed in collaboration with Avenue Bank, 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. 

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