‘More neobanks will fail’ says WLTH’s Brodie Haupt

Once hot start-ups will soon join the likes of Xinja and exit the Australian market, says one CEO.

WLTH co-founder Brodie Haupt. Source: Supplied.

More Australian neobanks will join the likes of Xinja and exit the market, according to the co-founder of fintech company WLTH, Brodie Haupt, who says new start-ups have focused too much on a splashy launch strategy and not enough on their product base.

Xinja last month it would hand back its banking licence and remove its transaction and savings products, blaming the COVID-19 pandemic and a difficult capital-raising environment for its failure.

Speaking to The Australian, Mr Haupt said Xinja – which had $413m in retail deposits on its balance sheet at the end of October according to figures from APRA – was not an isolated example of a neobank trying too much too soon.

“Xinja won‘t be the only entrant to fail, as we see new entrants trying to push into the market via a launch strategy that is unsustainable and far too capital intensive,” Mr Haupt said. “Which is why we have been extremely thorough and considered in our approach to entering into the market.

“We are focused on solution-based objectives … Trying to remove pain points from the lending and payments sectors, while adding further unique selling points that will elevate our customer experience above the competition.”

The executive added that the big four banks’ market dominance in Australia opened an opportunity for new players in the space to give consumers something different, and that success was still possible despite their mammoth collective size.

Brisbane-based WLTH this month announced its official launch, with growth projections of $1.23 billion worth of residential and commercial loans by the end of FY22.

“The digital banking, lending and payments sector in Australia is still such an infant-industry sector, in comparison to the UK and European regions,” Mr Haupt said. “Our ambition is to change the lending and payments experience to become a more positive one. To create an offering that is both high value for consumers and purpose-led.

“We hope to heavily contribute to change in the lending and payments landscape in Australia by offering end-to-end digital solutions that save both time and money for consumers and business owners, alike. We are going to market with our first offering being a digital approach to property secured lending.”

WLTH’s so-called secret sauce is its “Lending Loop” platform, which allows customers to apply for loans online without supplying any paper-based documents, statements or ID.

“We anticipate we will settle in excess of $1.2bn in property loans by the end FY22, via both our internal lending specialist team and our existing broker channel network,” Mr Haupt said.

The company is hoping to woo customers with its launch loan offer of 2.09 per cent for Owner Occupied home loans.

“We have a comprehensive road map of future releases that will revolutionise the digital money experience. Which will include WLTH Pay, a payments app with cards to market in 2021, while also offering a loyalty system that will be unrivalled, by today‘s standards,” Mr Haupt said.

“We are targeting only 15,000 account holders on launch for that product, with our waitlist already gaining solid traction in the past few weeks.

“We do intend to shake up the industry both in Australia and on a global scale, however we don‘t intend to rush the business, as we strongly believe in an incremental and sustainable business model, which is underpinned by our own proprietary technology platforms.”