Qorus Banking Innovation Awards 2023 - Winner

Challenger bank - Judo Bank a specialist, pure play, SMB lender

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11/09/2023 Banking Innovation

About

In response to the major bank market failure to provide small and medium businesses (SMBs) capital, Judo Bank was created as a unique, specialised SMB bank. Our purpose is to be the most trusted SMB business bank in Australia and our aspiration is to build a world class bank. Essentially, we are bringing back what was respected about banking years ago - relationships, with modern, cloud technology and the application of data and digitization. We are using technology to create an efficient, high-touch model to support SMBs.

Innovation presentation

FinTech’s have been working on providing capital to SMB’s for over a decade. Yet, few companies continue to be standalone in their efforts or focus and SMBs still struggle to access capital. Judo stands out in several ways:

• Delivering an innovation in customer experience resulting in a leading customer Net Promoter Score of +70

• A challenger bank achieving profitability early. We are the fastest challenger bank to achieve profitability, as a standalone startup, globally.

• According to the Financial Times in 2023, we are the 4th fastest growth company in Asia Pacific and the fastest financial services growth company in the region.

• Earlier this year, we were also deemed by LinkedIn -#1 place to work in Australia.

Redefining relationship banking for the modern era is our innovation. By leveraging technology and innovation we have proven we can better serve SMBs, a naturally heterogeneous customer segment. We believe the "butcher, banker and candlestick maker" are not the same and want a bank who knows them and cares about them.

Here is Relationship Banking in the words our customers and bankers.

https://www.youtube.com/watch?v=vPhs_vscE58

Uniqueness of the project

Our definition of relationship banking is putting the banker and the customer at the centre of all we do.

Our customers have a dedicated banker and have their mobile phone number. Customers can call their bankers, not a call centre. Bankers get to know our customers via in-person visits to customer locations, understanding their businesses and needs, and building deep relationships with them, it is a high touch model.

Our bankers can make in-market decisions as they have the technology at their fingertips. They are empowered to use their knowledge of the market they operate in to determine credit worthiness.

Bankers possess strong credit skills and focus on Judo’s unique four C’s of credit approach:

- Character – most important, including track record, experience of the business owner

- Capacity – ability to repay the debt,

- Capital – how much capital has the business built over time, and,

- Collateral – security for the loan, which is the only ‘C’ in the major banks.

As SMEs tend to be time poor, they need a decision on capital in weeks not months. Our model provides in-market by bankers and Credit team members, decision making at speed.

Our path to building a world class bank is across three horizons- Build the bank, Scale the Bank, and Achieve World Class. Refer to PDF document.

Building a bank is not for the light-hearted. Our success to date has been a result of hard work, tough choices and the HOW we went about building the bank.

This involved:

1. Having a clear strategy that addressed a market failure. Our strategy has not changed or pivoted.

2. Proving the customer value proposition in market, early

3. Executing. We were one of four companies to receive a banking license in 2019. A license had not been issued for 30 years in Australia. We are the only challenger bank still operating.

4. Focusing on profitability as described above

5. Hiring an Experienced management and team, and

6. Focusing on our culture – with a migrant mindset

The failure of major banks is not limited to Australia. Across the globe we see the abandonment of SMBs. Our relationship banking model is applicable globally, where ever banks believe that relationships for SMBs are key to helping them succeed.

We believe people are what matter in serving customers well. Leveraging technology, digital and data puts customer service into a new stratosphere. Bankers empowered with technology at their fingertips do more for customers in less time.

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