Avenue Bank (Avenue) has been granted a full licence to operate as an Authorised Deposit Taking Institution (ADI) by the Australian Prudential Regulation Authority (APRA).
The digital bank will initially focus on alleviating a significant pain point for businesses: the arduous process of securing bank guarantees for landlords.
Current bank guarantee procedures are onerous, predominantly paper-centric, and can take up to two months while Avenue’s digitally enabled guarantee has a turnaround time of as little as one day.
Avenue research shows that 29 percent of businesses have had to defer an office move and a further 46 percent have had their moves disrupted because of the process of obtaining a bank guarantee.
Avenue CEO Peita Piper said the bank had reinvented the bank guarantee, providing fast, fair, and fuss-free service to Australian businesses.
“Australia’s banking landscape has evolved, yet the bank guarantee market remains stagnant, burdened by outdated, paper-based processes. Small businesses are stifled by unnecessary delays, uncertainty, and financial strains,” she said.
“Despite nearly half of business owners believing the bank guarantee process takes too long, there has been little innovation in this roughly $9 billion segment.”
Avenue is the first and only bank to specialise in bank guarantees.
Its digital solutions will ease the management of bank guarantees and the claims process for landlords and enhance security, mitigating the risk of loss, theft, or fraud while tenants will benefit from a fully digital origination process.
“With specialised customer service, we will move as fast as the customer moves,” Ms Piper said.
Tank Stream Labs CEO Bradley Delamare, a customer of Avenue, said the bank’s tech solution was fresh and innovative.
“I went through the traditional bank guarantee process, and it was painful. Not only did I have to obtain multiple signatures for multiple documents, but I also had to hand deliver them to the bank’s head office. In the 21st century, surely there’s a better way,” he said.
“It feels like we’re in really good hands with Avenue Bank.”
Avenue Bank pays a competitive interest rate to customers on their security deposits which are 100 percent government-guaranteed (up to $250,000 per account holder).
For a limited time, it will also waive application fees.
“This is only the beginning for Avenue,” Ms Piper said.
“We are committed to delivering further innovation to the bank guarantee market.”