The aggregation group has invested $15 million in a neobank, leveraging its banking as a service offering and white labelling a personal finance manager app to AFG customers.
Australian Finance Group (AFG) has partnered with fintech Volt to form a strategic alliance and is investing $15 million investment into the company.
The alliance will leverage Volt’s Banking as a Service (BaaS) offering, by providing digital white labelled mortgage products to AFG’s network of more than 2,975 brokers.
Volt and AFG have said they will also work together to develop and distribute further Volt white label products to AFG brokers in the future, including personal and business loans.
The strategic alliance will also deliver AFG a white label personal finance manager (PFM) app powered by Volt.
This will help AFG’s customers better manage their finances and, in the future, “allow AFG brokers to provide a more efficient home loan application process for borrowers”.
The strategic alliance and investment is expected to complete after satisfaction of a number of conditions (with the $15 million investment held in escrow until satisfaction of the conditions).
Once these are met, the white label Volt-funded digital mortgage product and AFG branded PFM app are expected to be piloted in the last quarter of this calendar year, and be made available to AFG brokers in the first quarter of 2022.
It will give AFG a 7.6 per cent shareholding in Volt Corporation Limited based on Volt’s current series raising amount of $85 million.
AFG CEO David Bailey commented: “This alliance will deliver significant value to both companies as we combine Volt’s technology with AFG’s vast distribution footprint to deliver competitive products to the market and streamlined digital solutions for brokers and their customers. The combination of innovative lending and financial management technology, via Volt’s digital bank offering and AFG’s distribution, is compelling.”
Volt founder and CEO, Steve Weston, said: “Volt is thrilled to partner with AFG to bring a digital mortgage and other financial services products to Australian consumers at scale. AFG is a pioneer of the mortgage broking industry and touches one in every eleven home loans written in Australia. Its endorsement of Volt’s digital offering, through this strategic alliance and equity investment, is a landmark moment for our company.”
“Volt has distinguished itself by pursuing a unique Banking as a Service (BaaS) strategy and the partnership with AFG is testament to the demand for integrated and white-label banking to help businesses deepen relationships with their customers.”
“The management of financial services is no longer the domain of a handful of large institutions. Volt wants to facilitate a future where a range of businesses, large and small, can deepen their customer relationships through Volt’s BaaS offering,” Mr. Weston added.
Former HSBC chair joins Volt board
In addition to the strategic alliance and raise, former chair of HSBC Bank Australia, Graham Bradley AM, will join the Volt board as chair in June, subject to regulatory approval.
Volt’s current chair, John Masters, will become deputy chair and chair of the Audit Committee.
Mr Bradley has chaired numerous ASX-listed companies, including Stockland, GrainCorp, EnergyAustralia, Virgin Australia International Holdings, and Infrastructure NSW.
He was also managing director of Perpetual Limited from 1996—2003, and chaired HSBC Bank Australia from 2004—2020.
Welcoming Mr. Bradley, Steve Weston said: “Graham is one of the country’s most experienced company directors and brings a wealth of knowledge to Volt. He is eager to be part of the future of banking and will be fundamental in driving Volt’s ambitions.”
Mr Bradley said: “I am excited by the opportunities that lie ahead for Volt and am delighted to join the team that will shape the company’s future strategic direction.
“The Volt team has successfully navigated the COVID disruptions of 2020 with their Banking as a Service strategy intact. With the new strategic partnership with AFG and additional capital funding, Volt is well-positioned to scale up quickly to provide highly-efficient and competitive financial services to the Australian market.”
AFG invest $15m in neobank
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.