Six years on from its launch, a non-bank has announced it is expanding into prime lending.
The transition from offering small personal loans in the sub and near prime space to entering the prime personal loan market is a “natural evolution” for Brisbane-based Jacaranda Finance, according to CEO and founder Daniel Wessels.
“When I started Jacaranda Finance, we had a simple mission of creating seamless financial inclusion. We wanted to offer lending services to the ‘unbankable’, the consumers that traditional finance had turned their back on,” he explained.
“Fuelled by open banking, AI and machine learning we’ve built a platform that gives consumers the digital experience they demand.
“We have been operating in the subprime and near prime space for a number of years and, over time, we’ve seen an increase in clean credit borrowers as traditional lenders rely heavily on credit scores and as digitally savvy consumers flock away from the inflexible nature of traditional lending and banking services.”
As fintechs have established their legitimacy and challenged traditional lenders within the country, Australian banks’ share of personal loans has fallen from 86% to 72% from 2010 to 2018. Jacaranda partially attributes this shift to banks’ resistance to embracing advancements in the sector and growing public scepticism.
According to Wessels, Jacaranda’s customers “are loving” the ways the group has engaged with them to date as it continues to creatively use their data to their benefit.
“In the short term, we’re going to stick to our game plan of using the wealth of consumer data that we collect to be innovative, launch new products and establish new partnerships,” Wessels added.
“I’ve said it before, but it’s evolve or die when it comes to technology and the line between finance and tech is only going to continue to blur with time. Financial services are about being nifty, agile and responsive to the ever-changing needs of customers.”
