MONEYME is on the front foot as Aussie finance companies scramble for tech lead over peers

As one of Australia’s only fintechs that has built its proven and proprietary technology from the ground up, MONEYME is leveraging its technology leadership to create commercial advantages and become a powerhouse in the Australian finance lending space.

MONEYME (ASX:MME) is positioned to be a major player not only in the fast-growing Australian fintech lending industry but the overall lending sector, as traditional lenders scramble to catch up its technology capabilities.

Co-founder, MD, and CEO of the fintech lender, Clayton Howes, said many of the banks and traditional lenders have been left behind when it comes to adopting tech for the modern financial world, and are now paying good money to become more tech-enabled.

“NAB bought neobank 86 400 for a good amount of money purely to leverage its technology and innovation,” he said.

He said another example is consumer finance firm Latitude Group, which paid a whopping $200 million for Symple in 2021 again only for a bit of technology.

SocietyOne acquisition puts MONEYME in leading position

In March this year, MONEYME completed its acquisition of digital lender SocietyOne, delivering a step change in its loan book to $1.2b.

But while the incumbents acquire fintechs to leverage their technological capabilities, MONEYME is using its own innovation to supercharge SocietyOne’s offering.

Howes said MONEYME has hit a major milestone in the post-acquisition integration with tech-enabling SocietyOne onto its proprietary technology platform Horizon.

Less than 6 months after the $132 million acquisition, SocietyOne loans are now originated via Horizon.

“SocietyOne’s customer experience is now powered by MONEYME’s technology, which is pretty remarkable given how recently the acquisition occurred. But that is the beauty of owning your own high-tech,” Howes said.

“Some acquisitions take years before they deliver any tech-driven outcomes, but when you have the type of technology we have built, which is a micro service based technology, you can move incredibly fast.”

He said for the first time in SocietyOne’s history, customers can have a loan approved and money deposited into their bank account in under an hour.

“We’ve removed the inefficiency from what was previously a 24-hour process. On the second day live, we originated SocietyOne loans within 34 minutes,” he said.

MONEYME executes profitability strategy

Howes said the business in the past year has shown it can deliver both organic and inorganic growth. The group has now moved towards a profitability focus to build resilience in a higher interest rate world.

“MONEYME was profitable for four consecutive years from 2017 through to 2020, before entering into hyper growth mode,” he said.

“We grew our business four-fold in the last financial year and built significant scale advantages that we can now leverage to shift back into delivering stat profits.”

Howes said removing the human inefficiencies in traditional processing will help the company deliver its promise to shareholders to return to statutory profitability and achieve greater than $200 million in Net Revenue for FY23.

“There are not many businesses that are statutorily profitable in our sector because they are all trying to build scale while not operating as efficiently as they could if they had the right tech capabilities”.

Strong alternative to bank lending

Howes said MONEYME has found a niche with the under-serviced market of consumers who want access to credit products efficiently and are willing to use alternatives to banks.

In this way, MONEYME has captured a digitally-savvy, young audience on their financial journey. He points out that when the company was founded in 2013, the average customer age was about 23.

“Nine years later, our average customer age is about 32. So these are the same customers,” he said.

“We have stayed relevant to them by leading the way with a digital-first approach that has now become mainstream.

“This is a customer demographic that is prime for a credit card, personal and car finance, and near ready for mortgages,” he said.

Capturing higher credit ratings

Howes said the credit profile of its loan book is changing by design, as MONEYME is targeting customers with a higher credit rating.

“The average Equifax profile of our loan book is now 711, and the portion of our loan book with a score below 600 has significantly reduced,” he said.

“600 is still a good score when representing a younger demographic with less time to build up a credit history, but it’s now only 19% of our book, compared to 36% a year ago.”

Shifting up a gear

Autopay continues to be a priority for the business as it prepares to unlock the opportunity in the auto finance market through strategic partnerships and new product innovation designed to transform the car buying experience for consumers.

“The banks have clearly shown their hands and want to protect their mortgage books, which gives us a ton of space in the critical auto finance industry,” Howes said.

“Banks are pulling out of auto finance and in a single year we have grown Autopay from a few million to half a billion in loans, which is phenomenal.”

Howes also believes the auto finance niche is quite well equipped to manage through the rising interest rate environment.

“Some of the rate rises we’ve passed through to the customer have meant a $30,000 car loan has only meant a $30 increase in monthly payments for the customer. So it’s not in the same ballpark as increasing the rate of a mortgage, which can have a significant impact on people’s cost of living and spending power,” he said.