Former CEOs of Big Four Banks Hartzer, Thorburn and Norris Back Online Lender Nano
Former Westpac, Commonwealth Bank and National Australia Bank bosses have invested in nano digital home loans, as they look to expand their partnerships with lenders struggling with a potentially disruptive shift to lending in line.
In a recent fundraiser, former Westpac chief executive Brian Hartzer, former NAB chief Andrew Thorburn and former ABC chief Ralph Norris all invested in the digital start-up, which has was founded by former Westpac executives Andrew Walker and Chris Lumby.
Nano is one of several digital lenders alongside Tic: Toc and Athena Home Loans looking to disrupt the lucrative mortgage market by offering fast online approvals.
The non-bank lender was launched earlier this year, and Mr Walker said he approves about $ 20 million in loans per week, putting him on track to underwrite over $ 1 billion in loans to the during its first year.
The investments by former bank CEOs come as Nano, which pioneered the sale of consumer loans, seeks to expand by offering software services to banks and other lenders facing a transition to online lending.
Nano said it recently obtained a patent for its “real-time automated digital mortgage application and decision engine” by the Australian Patent Office. Mr Walker said that while other lenders have software that automates certain processes, such as loan decision making, Nano’s system covers property valuation, credit scoring , ease of servicing loans and identifying clients.
Mr Walker said he believes the shift to online mortgages, which has happened to a much greater extent in the United States, is now happening faster than it had anticipated in Australia. He argued that if Australia followed the pattern seen in the United States, the annual flow of new digital home loans could reach $ 100 billion in a few years.
But although challengers such as Nano are experiencing strong growth, their share of mortgages is still tiny compared to the Big Four banks, which control around 80% of the Australian market. The biggest player, CBA, will launch its own digital mortgage later this year.