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Fintech in financial services – the rise of a competitive landscape

Lachlan_HeusslerFintech is one of the fastest growing sectors in the financial services industry – and disruption is underway in the financial services market in Australia and globally. More recently, it has emerged as one of the biggest opportunities and threats confronting the sector. The opportunities include innovative banking methods, improved customer experience, unlocking capital through P2P lending, crowd-funding etc. In turn, this poses a threat to the future of traditional lending and the development of an increasingly competitive landscape. Financial services is one of the fastest growing sectors and vital to its expansion is the advent of new products, services and solutions within the industry itself.

In the lead up to the 25th Annual Credit Law Conference, we caught up with Lachlan Heussler, Managing Director at Spotcap Australia. In this short interview, Lachlan shares his views on fintech disruption, the emerging P2P lending sector in Australia, the credit landscape and ASIC’s role during this critical time.

He will be joining a panel discussion at the conference titled ‘Fintech and emerging technologies in the alternative lending space – opportunities and challenges’.

  1. There are numerous ways to describe fintech – how would you best define the term?

I guess I think of Fintech as exactly what it describes – ‘Financial Technology’. For me Fintech is the use of technology to deliver financial services that are faster, more transparent, more convenient to the end user and often cheaper than has been delivered in the past.

  1. Fintech disrupters are perceived to be able to cut costs and improve the quality of financial services – how can companies like Spotcap, gain the trust of investors and consumers particularly in an environment with numerous options?

This is a great question and it is the main obstacle that many of the newer Fintech disruptors need to overcome to be successful. I guess it boils down to being able to offer a great product that fulfils a demand in the marketplace. We often use newer methods to deliver these products and services which do require an element of trust on behalf of the clients, but i think once the clients experience the products and see what is possible that we can win them over.

  1. The P2P lending sector is an emerging market here in Australia – did Spotcap face any particular challenges as a start-up?

Spotcap is technically not a P2P lender, we fund our loans to SMEs from our own balance sheet, but like all startups we faced our own set of challenges in starting out. Navigating the regulatory landscape is always interesting, especially for those with newer business models but even things like establishing a relationship with a transaction banking partner can prove difficult as many larger organisations do not want the reputational risk of dealing with a new entrant to the market. Hiring the right staff can also be difficult as working for a startup is not a normal 9-5 job.

  1. What are your thoughts on the potential for fintech newcomers to create a more diverse and stable, credit landscape?

I think the credit market in Australia needs more players. We have traditionally had a very concentrated banking system and this has both good and bad aspects. This concentration has created opportunities for businesses like Spotcap to come in and offer credit products to parts the market that have been underserved by the big banks. We offer unsecured credit products to SMEs who might ordinarily not be able to obtain finance via the traditional lenders.

  1. ASIC has its sights set on the fintech sector, particularly given the launch of their ‘Innovation Hub’ two months ago –  how significant is ASIC’s role in ensuring the take-off, of the fintech revolution?

Very. To its credit ASIC seems to be embracing the new Fintech movement head on and is hopefully trying to improve their engagement with Fintech entrepreneurs in Australia looking at improving financial services for the better. An engaged regulator will be most important if the sector is going to flourish down here.

Spotcap is an online lender to small and medium sized enterprises in Australia. Our credit products include unsecured lines of credit and business loans. We use technology to enable a 100% online application process that takes as little as 5 minutes to apply for and we can usually have an underwriting response to the client within a 24 hour period. We have built a proprietary credit algorithm that uses vast amounts of both public and private data to help in our decision making process.

Lachlan will be presenting at the 25th Annual Credit Law Conference 7 – 9 October 2015 | Sheraton Mirage, Gold Coast

*Spotcap is an online lender to small and medium sized enterprises in Australia. Our credit products include unsecured lines of credit and business loans. We use technology to enable a 100% online application process that takes as little as 5 minutes to apply for and we can usually have an underwriting response to the client within a 24 hour period. We have built a proprietary credit algorithm that uses vast amounts of both public and private data to help in our decision making process

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