Big deal aimed at sub 15 minute approval time, risk-priced interest rates
As part of its deal to acquire Australian Mortgage, digital bank Volt is looking to tackle slow turnaround times and introduce risk-based rate pricing.
Volt and Australian Mortgage did not disclose the terms of the transaction, but it reportedly includes mainly shares in Volt, according to a report by The Australian. The digital bank intends to ramp up its banking operations and wants a loan book of $3 billion by late next year.
Volt was drawn by Australian Mortgage’s proprietary technology, which facilitates “fully verified” loan approval times usually of less than 15 minutes and can offer borrowers pricing matched to their risk profile.
The major banks have faced criticism recently as mortgage approval times have skyrocketed in both the branch and broker channels as mortgage demand spiked.
Volt chief executive Steve Weston told The Australian that the digital bank’s purchase of Australian Mortgage would boost its differentiation.
“If there is technology that we think is going to provide us a competitive advantage, we want to own that,” Weston said.
Volt is also pursuing a partnership model where it allies with other companies to provide them banking services. Last month, Volt partnered with listed broking group AFG and confirmed that it plans an ASX float for 2022.
Weston told The Australian that the AFG partnership would not be hindered by the fact that Australian Mortgage’s distribution partners include AFG rival Mortgage Choice.