Challenger business lender Judo will leverage live data insights from e-commerce and accounting platforms to offer proactive advice and drive “quality” conversations with customers, teaming with a UK fintech Codat to deliver the new capability.
Enlisting London-born fintech Codat, Judo’s new data integration capabilities – which tap data insights from SME software providers such as Xero and Shopify – will provide it with financial information to support its business customers.
Codat’s technology is an API that provides lenders standardised access to more than 30 software platforms commonly used by small businesses through three types of integrations: accounting, banking, and commerce.
According to Lisa Frazier, the Judo’s chief operating officer (and previously innovation chief of US banking giant Wells Fargo), this partnership will help Judo service its SME clients via “relationship-led banking empowered by data and technology”.
She added that the use of “rich, real-time data” to support banker conversations would strengthen Judo’s customer relationships.
For Codat, on the other hand, the partnership marks the beginning of its business objectives down under, with Australia recognised as the “most advanced market” in terms of coverage and adoption of cloud accounting platforms.
This, the fintech said, is owed partly to the introduction of Single Touch Payroll (STP) regulations, as well as the “pioneering development” of homegrown platforms like Xero.
Codat further cited recent growth in Australia’s SME market – with ABS figures showing a 3.5 per cent increase in the number of businesses over FY21; most of these will rely on accounting software – as a key reason for its regional expansion.
Speaking to FST Media, Matthew Tyrell, Asia Pacific commercial director at Codat described Judo Bank as a “key foundation partner” for the fintech.
“[Judo’s] technology-first approach to lending aligns with Codat’s vision of being the universal API for business data,” Tyrell said.
For him, services such as accounting, point-of-sale and e-commerce platforms hold the “central source of truth” for business data (rather than bank accounts), with great “value and utility” to be unlocked.
“Ultimately, connectivity to these systems has the greatest potential to reduce the administrative burden for small businesses and drive better access to financial services,” Tyrell said.
Founded in 2017, Codat’s services also include automated reconciliation, business dashboarding and loan decisioning. The fintech has offices in London, New York, San Francisco and now, Sydney.
Among the fintech’s customers include a range of financial institutions, technology firms and SME providers, including UK retail challenger Atom Bank as well as PayPal.
Judo Bank, meanwhile, is not the only Australian neobank targeting SMEs; Avenue Bank is the latest challenger to acquire a restricted lending license from APRA and is working towards becoming a fully-fledged bank by 2022.