SME-specialist lender Avenue Bank has been granted an unrestricted banking licence from industry regulator APRA after two and a half years trading as a rADI.
Founded in 2018, the Melbourne-headquartered, branchless bank has held its restricted authorised deposit-taking institution (rADI) licence since September 2021.
Granted by APRA for a maximum of two years, the rADI enabled Avenue to operate in a limited capacity – “with a select few customers and business partners” and limits on deposit amounts it can accept – without meeting full conditions of the ADI prudential framework.
Last year, the bank was given a six-month extension by APRA to its restricted ADI (rADI) licence, from September, with the regulator stating that it “[recognised] the unique circumstances of Avenue Bank’s application” and judged that a “short extension was warranted”.
Avenue has pitched its services at “unloved and underserviced” SMEs, zeroing in on businesses with turnovers of $25 million and under.
Avenue chief executive Peita Piper, commenting on the long-awaited receipt this week of its unrestricted ADI, underscored the neobank’s redoubled focus on bank guarantees.
“Australia’s banking landscape has evolved, yet the bank guarantee market remains stagnant, burdened by outdated, paper-based processes. Small businesses are stifled by unnecessary delays, uncertainty, and financial strains,” Piper said.
Avenue claims to be Australia’s “first and only” bank to specialise in bank guarantees, with promises to deliver a fully digitised bank guarantee application and issuance process.
The small biz-specialist neobank currently boasts a fast-tracked bank guarantee application process – able to be completed by customers “within minutes” – instant preapproval, and full issuance “in as little as” 24 hours.
“[Avenue’s] digital solutions will ease the management of bank guarantees and the claims process for landlords and enhance security, mitigating the risk of loss, theft, or fraud while tenants will benefit from a fully digital origination process,” the bank said.
For Piper, “this is only the beginning for Avenue.”
“We are committed to delivering further innovation to the bank guarantee market.”
Digital is at the core of Avenue’s offering. The bank’s tech stack was built cloud-native in AWS, with SAP Cloud Banking serving as its core banking platform, alongside Salesforce’s PaaS platform Force.com and Equinix, among other vendor partners, providing “fit for purpose” solutions in digital origination and customer relationship management (CRM).
