CANBERRA: Taxis with the rise of Uber, hotel accommodation with Airbnb and, in recent years, newspapers have been changed forever by the internet. Now the big banks are facing new online competitors and one US trailblazer is making Australia its first market outside North America. The new and potentially disruptive bank competitor is OnDeck and it is aiming to beat traditional “bricks and mortar” banks in evaluating and approving loans to small businesses.
OnDeck estimates there are more than two million small businesses in Australia which are not in the sights of the major banks which can sometimes take weeks to approve a loan.With the US model, OnDeck says the approval time can be two to three days.
The disruption to the traditional banking model includes the way the online lender will be run from the top. OnDeck chief executive Cameron Poolman is not a banker but an e-commerce entrepreneur from his days at the online trader Grays Online.”OnDeck answers some of the key challenges for small business at the moment,” Mr Poolman told the ABC’s AM program.
“That’s the ability to access working capital quickly and easily, so I suppose we’re what you would call a disruptive lender – someone that’s able to analyse data and use a streamlined application process to get funds to small business within days rather than weeks.”
Mr Poolman said the greater use of technology and analytics in the process of assessing, approving and declining loans does not necessarily mean computers will be making the decisions.”There are a lot of humans involved but they’re not the traditional bank manager,” he said.
“So we’ve got people on the phone able to answer any questions and we’ve got data analysts. They just perform different functions than what you’d expect in a traditional bank.”There is a lot of human engagement with this and I’d actually argue that it’s actually more. We are open significantly longer hours than a normal traditional funder would be.”
New disruptive players such as OnDeck are not deposit-taking institutions and will be regulated by the Australian Securities and Investments Commission (ASIC) rather than the Australian Prudential Regulation Authority (APRA).
