Car Loans Australia :: News

Share this news item!

AMP's New Business-Focused Digital Bank

AMP's New Business-Focused Digital Bank

AMP Group has announced its plans to launch a digital bank designed for sole traders and small businesses, expected to be operational by early 2025.
This venture, aimed at disrupting a ready market, will see AMP partner with Engine by Starling, a UK-based neobank subsidiary, to leverage its modular platform for a scalable and robust infrastructure.

To bring this innovative offering to life, AMP has partnered with Engine by Starling, a subsidiary of the renowned UK-based neobank Starling. Engine's modularized platform will serve as the foundation for AMP's new digital bank, providing a robust and scalable infrastructure.

AMP Bank's CEO, Sean O'Malley, has confirmed that while the digital bank will fall under the existing banking arm of AMP, it will operate as a distinct and independent entity, separated from the rest of the division.

The primary focus of this new digital bank will be on serving sole traders, micro-businesses, and small businesses with 1 to 20 employees. Transaction and savings accounts will be the core offerings initially, with lending services potentially being added in the future. AMP recognizes the importance of delivering a seamless banking experience, complete with spending insights, real-time payments, debit cards, and seamless integration with existing accounting software used by SMEs.

"Our vision for the new bank is to provide small business owners with tailored functionality and features to manage their finances on-the-go from their mobile phones," said AMP in a statement.

The digital bank's target audience extends beyond SME customers, as AMP aims to capture retail consumers by specifically catering to their transactional needs.

AMP has allocated approximately $60 million over the fiscal years 2024-2025 for the launch of this new banking offering, with a majority of the funding being capitalized. Blair Vernon, AMP's Chief Financial Officer, clarified that this funding will be repurposed from the existing business simplification and growth program, ensuring it aligns with the company's current cost targets.

Apart from expanding AMP's product portfolio, the establishment of this digital bank opens up new opportunities for funding and diversified revenue streams. AMP's CEO, Alexis George, recognizes the need to address the relatively low transaction balances in their current mix, and this new venture will help fulfill that objective.

Why Starling?

After evaluating nearly 20 Banking as a Service (BaaS) offerings both internationally and locally, AMP selected Starling's 'Engine' platform as the optimal choice. O'Malley highlighted Engine's "deep core" structure as a key differentiator, consolidating the app experience, staff experience, and customer experience into a cohesive and modularized platform.

AMP also recognized the success of Starling as a digital-only consumer bank in the UK, where it has gained approximately 3.6 million accounts and a substantial 9.4% market share in business banking.

Engine's integrated and seamless human support function, including a 24/7 contact center, was another factor that influenced AMP's decision. It is anticipated that this support system will also be implemented for AMP's digital bank.

Over the next 12 months, AMP will commence the build and deployment phase of the new platform. This process will involve market localization and integration with Australia's fast payment rails. Just like Starling's approach, AMP's integration will be gradual and progressive.

A Focus on SMEs: Why is AMP Expanding into this Area?

Australia's SME banking market offers significant opportunities for a new entrant, according to Alexis George, AMP's Chief Executive Officer. Despite experiencing rapid growth, SMEs, including approximately 2.6 million businesses, have historically been underserved by banks.

In Alex George's words, "Ninety-nine per cent of businesses in Australia are small, with most operating in the small trader and micro segments. AMP is well-positioned to capitalize on this underserved market, as many SMEs are dissatisfied with the current offerings in the market."

She further explains, "What they are seeking is a connected, simple, digital-first offering - and we are bringing the features and functionality that the market is yearning for."

By targeting SMEs, AMP's deposit book is also expected to benefit. On average, small traders, micro-businesses, and SMEs hold approximately $47,000 in their accounts, with larger SMEs holding around $168,000. As of June 2021, the deposit balances from this segment totaled nearly $220 billion.

O'Malley has set ambitious goals, projecting that AMP's digital bank could potentially capture between three to six percent of the Australian SME banking market with time.

Published:Friday, 17th Nov 2023

Share this news item:

Finance News

New Challenges for Aussie Home Buyers New Challenges for Aussie Home Buyers
29 Nov 2023:

The latest ANZ CoreLogic Housing Affordability Report for November has revealed a 'triple whammy' effect on prospective home buyers in Australia. Affordability has worsened for not only buyers but also mortgage holders and renters, and unfortunately, the situation is predicted to deteriorate further by 2024. - read more
Baby Boomers' Spending Habits: A Challenge for RBA Baby Boomers' Spending Habits: A Challenge for RBA
28 Nov 2023:

Last week's release of spending data by Commbank IQ has shed light on a concerning trend that is most likely causing headaches within the Reserve Bank of Australia (RBA). - read more
Rise in Small Businesses Complaints to AFCA Indicates Growing Concerns Rise in Small Businesses Complaints to AFCA Indicates Growing Concerns
24 Nov 2023:

In the 2022-23 financial year, small businesses lodged a total of 3,807 complaints with the Australian Financial Complaints Authority (AFCA), indicating a significant increase of 9% compared to the previous year. As a result of these complaints, small businesses received $23.4 million in compensation and refunds, marking a 16% increase from the previous financial year. - read more
Why Embracing AI Can Enhance Your Financial Advice Business Why Embracing AI Can Enhance Your Financial Advice Business
23 Nov 2023:

Sue Viskovic, the founder of consulting firm Elixir Consulting, highlights the importance of incorporating AI into financial advice businesses in an upcoming episode of the IFA podcast. While there may be apprehension regarding the role of digital tools in providing advice, Viskovic emphasizes the continued need for human interaction and trust. - read more
New Insights on Inflation and the Australian Economy New Insights on Inflation and the Australian Economy
22 Nov 2023:

Reserve Bank governor Michele Bullock has issued a warning, stating that inflation will continue to be a 'crucial challenge' for the Australian economy in the next one or two years. While many attribute the current inflationary pressures to supply-side constraints, Bullock emphasizes the underlying demand component that central banks are trying to address. - read more

Car Loans Articles

Your Car Loan Journey: From Application to Approval Your Car Loan Journey: From Application to Approval
In this article, we are embarking on a guided journey that we believe will help immensely in navigating the intricacies of the car loan process. - read more
Car Loans: Secured vs Unsecured Car Loans: Secured vs Unsecured
Car loans play a pivotal role in empowering individuals to afford their own vehicle, which can be a significant purchase. These loans, structured to fit within one's financial situation, can ease the burden of acquiring a car and assist in achieving personal convenience and mobility. - read more
How To Get The Best Deal On A New Car Loan How To Get The Best Deal On A New Car Loan
The process of buying a new car is an exciting time, however it can also be a bit stressful, especially when it comes to financing. With so many options on the market, it can be difficult to know how to get the best deal on a new car loan. - read more
Car Leasing Car Leasing
Leasing is an often misunderstood car financing option so, in response to subscriber feedback, we've included this article to help give you a better understanding of what it is and how it works. - read more
How to Buy a Car with Bad Credit: A step-by-step guide How to Buy a Car with Bad Credit: A step-by-step guide
A car is a major purchase, and for many people, it’s the second biggest purchase they’ll make after a home. If you have bad credit, you may be wondering if it’s even possible to buy a car. The good news is yes, it may be attainable - as long as you research your options and engage the right help. - read more

Need Help Finding a Loan?
Get a free car loan eligibility assessment and compare offers tailored specifically to your circumstances.
Loan Amount:
All finance quotes are provided free (via our secure server) and without obligation.
We respect your privacy.

Personal Loan:
a loan that is granted for personal use, normally unsecured and granted by a lender on the borrower's integrity and capacity to repay