The new Bank Bestie? Fintechs now Collaborators, not Disruptors


Spotcap New Zealand’s Managing Director, Lachlan Heussler, spoke last week at Heartland’s Conference on fintech at Eden Park in Auckland. The audience, made up of banks, fintechs and industry guests, came together for an afternoon exploring how banks and fintechs are set to collaborate, and form the evolution of the financial services industry worldwide.


Amongst other speakers on the day – including Neil Roberts of Harmoney and CEO of Heartland Bank, Jeff Greenslade – Lachlan spoke about the future of SME lending – and how both fintechs and banks have entered a new era of collaboration, evolving from its initial position as disruptive to traditional financial services.


Exploring the landscape of SME lending in both Australia and New Zealand, Lachlan spoke on what he sees as fintech’s role, where the banks can mutually benefit, and ultimately how SME borrowers stand to gain from an increasingly open, competitive business finance market.


“Fintechs have been traditionally positioned as disruptors, that we’re coming in to eat the banks’ lunch,” he said.

“Now the the attitude of the banks is evolving as they recognise there are aspects of our technology, processes and approach that they could learn from.”


“The challenge is exactly this: it’s the incumbents’ job to find innovation before the innovators find distribution. We are gearing everything towards maximising our distribution across both Australia and New Zealand.”


All speakers on the day highlighted the same point: that in this new era of collaboration, both fintechs and banks can benefit from each others’ strengths. The partnerships between Spotcap and Heartland, among many other bank-fintech arrangements, is demonstrative of this understanding.


The discussions also centred around the path of resistance to working with fintech players on the part of the banks, including how the sector has evolved. SME lending itself is also changing, and aspects of that evolution – such as the move towards non collateralised lending for SMEs and digitisation of application and underwriting processes – was also touched on as critical to the industry’s development.


Lachlan also outlined the benefit of Spotcap’s products for the end consumer, including a brief history of the Spotcap brand and its global footprint. The difference between a fintech lender such as Spotcap, versus an incumbent such as a bank – is vast, but the main benefits relate to the quick, paperless application process, rapid turnaround on decisioning, and the fact that often, alternative lenders won’t require assets to be held as security against funds borrowed.


A key point touched on by many of the speakers was, what happens if banks and fintechs don’t collaborate? The speakers all conclude that it would result in one of two outcomes: either the banks and fintechs work together, as seen with Heartland and the premise behind the conference, or they would continue to compete in the same space, serving slightly different segments of the market. With the latter point, there is a serious consideration for user experience – as in today’s fast-paced world, there needs to be an increasing emphasis on what people expect and demand of their financial solutions. This is exactly where fintechs have their niche – focusing on customer experience, and serving a part of the market traditionally not met by existing banking processes and services.


Heartland also recognises this, and has formed the basis of its relatively forward-thinking strategy to collaborate with fintechs ahead of the game. Aside from Spotcap, Heartland has also invested in peer-to-peer lender Harmoney, as well as NZ-based invoice financier Fuelled.


The 140-strong conference finished on a high, with networking drinks and canapes.


Many thanks to Heartland Bank for graciously hosting us – we look forward to the next meeting of the minds!


Until next time,

The Spotcap NZ team.