Australian payments company Tyro backed by Atlassian’s Mike Cannon-Brookes aims to start a new bank. In August the company got permission to become an “Authorised Deposit-taking Institution.” So, the firm can take deposits from customers.
“It is a bank, the cost of capital is completely different. We have fully government guaranteed deposits, we already have a huge acquiring business and we will be a full service bank. There’s not just cash flow, there’s lots of other sorts of loans we can offer,” says Cannon-Brookes, Atlassian co-founder and Tyro board member. Also, Mr Cannon-Brookes stresses the importance of the money raised from investors. “It is huge for Australia, it is only the fourth [private raising] north of $100 million and it is the first tech deal in Australia for Tiger,” he said.
“Our goal is to build the Tyro Bank that is cloud based, totally integrated and totally mobile and that provides awesome frictionless banking solutions. Tyro spent 12 years to establish itself as a tech player, and payment provider. Now we’re changing the game and we’re going to a very different level,” Tyro chief executive Jost Stollmann said.
He also said the firm decided that it could use its data from 14,000 business customers to take on the established banks in lending. Macquarie Research recently estimated there is about $60 billion of unmet demand for loans from small business, reads The Sydney Morning Herald.
Plus, according to Tyro, the company has 14,000 small and medium-sized business operating its payment terminals out of a total of 550,000 EFTPOS payment terminals.
“But that doesn’t do justice to this window of opportunity, which is we can create in Australia the next-generation bank,” Mr Stollman said. “We’re the only tech company that has been given a bank licence,” he noted.
However, it’s important to mention that according to Anthony Jenkins, the former CEO of Barclays, the current banking system will be significantly transformed by the financial technology in the next ten years. Almost half of the bank’s branches would be closed due to the rapid growth of new disruptive fintech startups, he says. “I’m predicting that over the next 10 years, we will see a number of very significant disruptions in financial services — let’s call them Uber moments – driven by companies in the Fintech sector,” he added.
According to Stollman, Tyro’s advantage is that it is “genetically a technology company”, reads Business Insider. So far, the company has the advantage of being technologically native.