Joust taps new Australian crowdfunding rules in bid to raise $2 million

Joust, an Adelaide based fintech that brings competitive tension to the home loan market by linking borrowers directly with over 20 lenders who compete against each other in real-time, has launched an equity crowdfunding campaign to raise $2 million.

The Joust platform brings disruption to the $1.7 trillion home loan mortgage market where $2 billion in fees are paid to mortgage brokers annually.

Described as a “consumer hero” fintech company - as Joust places the power back in consumers’ hands - Joust uses technology to provide transparency, competitive tension and superior customer outcomes to the home loan market.

Key points:
• Aiming to disrupt the mortgage broker channel under siege from the Hayne royal commission financial services inquiry
• Real-time auction platform driving competition and transparency to deliver lower interest rates to customers
• 2100 customers have already used the service, jousting home loans worth in excess of $1 billion
• $4.7 million company valuation (pre-money) representing a discount to comparable fintechs
• Funds raised will set Joust on a growth trajectory which includes new product and geographic expansion

Mark Bevan, Joust co-founder and CEO stated, “Joust is not a comparison site with a myriad of static rates, it is also not an online broker or aggregator. We are a revolutionary market-place model for home loan customers and lenders.

“Banks pay over $2 billion a year in commissions to mortgage brokers for the delivery of home loan borrowers, I know they want to pay less.

“Joust is an absolute disruptor to the $1.7 trillion home loan mortgage market. We have created a market-place for those that no longer want to deal with a middleman. We are the solution for banks and home loan consumers that want to circumvent the dated broker model. Our model is cheaper, simpler and more transparent”.

Using the capital it will raise via equity crowdfunding platform OnMarket, Joust plans to spend approximately half the money raised on a marketing campaign, with the remaining funds contributing towards new product development and potential overseas expansion.

Mr Bevan explains further, “The Joust platform is imminently scalable and, we believe it has significant growth potential both in its existing market and related markets. We currently operate only in the home loan space, but we are exploring offering new products through our platform, including insurance, car loans, and personal loans.”

Ben Bucknell CEO of OnMarket mentioned, “As a fellow fintech disruptor we are delighted that Joust has embraced the new equity crowdfunding laws. The investors that come to our platform are searching for the opportunity to invest in early stage, innovative and disruptive companies and Joust definitely meets this description.

The new crowd-sourced funding legislation allows unlisted public companies the opportunity to raise up to $5 million per year from the crowd. OnMarket has become the leading equity crowdfunding platform in Australia, successfully completing several equity crowdfunding deals in the short time since receiving an equity crowdfunding intermediary licence from ASIC.

The Joust equity crowdfunding offer is live via the OnMarket platform till August 3. Joust is targeting a minimum raise size of $700,000, and a maximum of $2 million. The minimum bid size into the offer is $500.

Click here for the full article

The Australian fintech getting rid of the mortgage brokers

Chris Pash JUL 20, 2018, 9:49 AM

  • Fintech Joust connects home loan customers directly to more than 20 lenders, saving time and money.
  • The startup aims to disrupt the mortgage broker channel.
  • Real-time auction platform drives competition and transparency to deliver lower interest rates.

Joust, an Adelaide fintech which cuts out fees to mortgage brokers by linking home borrowers directly with lenders, has launched an equity crowdfunding campaign to raise $2 million.

The platform, aimed cutting out the middleman and disrupting the $2 billion in fees paid to mortgage brokers each year, has more than 20 lenders bidding in real-time to get the business of prospective borrowers.

“Joust is not a comparison site with a myriad of static rates, it is also not an online broker or aggregator,” says Mark Bevan, Joust co-founder and CEO.

“We are a revolutionary market-place model for home loan customers and lenders.

“Banks pay over $2 billion a year in commissions to mortgage brokers for the delivery of home loan borrowers, I know they want to pay less. We are the solution for banks and home loan consumers that want to circumvent the dated broker model. Our model is cheaper, simpler and more transparent.”

Joust plans to spend half the money raised on a marketing campaign, with the rest for product development and potential expansion overseas.

“The Joust platform is imminently scalable and, we believe it has significant growth potential both in its existing market and related markets,” he says.

“We currently operate only in the home loan space, but we are exploring offering new products through our platform, including insurance, car loans, and personal loans.”

The equity crowdfunding campaign is via OnMarket, one of seven platforms which gained an equity crowdsourcing licence from corporate regulator ASIC in January.

The new crowd-sourced funding legislation allows unlisted public companies the opportunity to raise up to $5 million per year from the crowd.

“As a fellow fintech disruptor we are delighted that Joust has embraced the new equity crowdfunding laws,” says Ben Bucknell CEO of OnMarket.

“The investors that come to our platform are searching for the opportunity to invest in early stage, innovative and disruptive companies and Joust definitely meets this description.”

The Joust equity crowdfunding offer is live via the OnMarket platform until August 3. The minimum bid size into the offer is $500.

Click here for the full article

$2bn of broker commissions in fintech’s crosshairs

The Adviser 06:50 AM, 18 Jul 2018

An Australian fintech has set its sights on disrupting the dominance of the mortgage broking industry by appealing to the banks who it claims are keen to reduce the $2 billion they spend on broker commissions.

Adelaide-based online home loan platform Joust has distanced itself from its competitors in the fintech space, which has seen a flurry of mortgage disruptors in recent years.

“Joust is not a comparison site with a myriad of static rates. It is also not an online broker or aggregator. We are a revolutionary marketplace model for home loan customers and lenders,” Joust co-founder and CEO Mark Bevan said.

Joust is leveraging the negative press that the third-party channel has garnered over the last 12 months, driven by mainstream media coverage of the Productivity Commission’s draft report and the ongoing Hayne royal commission.

The group stated that it is “aiming to disrupt the mortgage broker channel under siege from the Hayne royal commission’s financial services inquiry”.

Mr Bevan believes that the banks are also looking for a way to reduce their distribution costs.

“Banks pay over $2 billion a year in commissions to mortgage brokers for the delivery of home loan borrowers. I know they want to pay less,” the CEO said.

However, while 2,100 customers have already used the service, “jousting” mortgages worth more than $1 billion, mortgage brokers remain the preferred channel for Australian borrowers.

Data from the MFAA compiled by Comparator shows that Australian brokers settled $46.1 billion in residential home loans in the quarter to March 2018.

This represents 55.3 per cent of home loans and is 1.7 per cent higher than the March 2017 quarter (53.6 per cent).

Meanwhile, Joust, which has valued its business at $4.7 million, has relationships with over 20 lenders who compete against each other in real time to win a customer’s loan. The group recently launched an equity crowdfunding campaign to raise $2 million. Mr Bevan said that the funds will be spent on new products, geographic expansion and marketing. Joust is also looking to scale its platform and enter new markets.

“The Joust platform is imminently scalable and, we believe, it has significant growth potential both in its existing market and related markets. We currently operate only in the home loan space, but we are exploring offering new products through our platform, including insurance, car loans and personal loans,” the CEO said.

Crowdfunding site OnMarket’s CEO, Ben Bucknell, said: “As a fellow fintech disruptor, we are delighted that Joust has embraced the new equity crowdfunding laws. The investors that come to our platform are searching for the opportunity to invest in early stage, innovative and disruptive companies and Joust definitely meets this description.”

The new crowd-sourced funding legislation allows unlisted public companies the opportunity to raise up to $5 million per year from the crowd.

Click here for the full article

Mortgage platform to chase low-deposit borrowers

By Charbel Kadib 04 July 2018

Mortgage marketplace Joust has launched an equity crowdfunding campaign with the goal of raising a minimum of $700,000 and up to $2 million.

Speaking to Mortgage Business, founder and managing director of Joust Mark Bevan noted that the equity raised would be used to fund the mortgage originator’s domestic and international growth ambitions, with Mr Bevan revealing that Joust is in “advanced talks” with New Zealand-based parties looking to replicate the business model.  

“Approximately half of the funds raised will be earmarked for marketing and advertising to scale the business here in Australia,” the MD said.

“The other half is a split between technology development plans we’ve got for other products beyond home loans, exploration of potential opportunities to replicate the Joust business model in overseas markets, and to build out our team and reduce some key person risk within the business, and add some broader skill sets.”

Mr Bevan also revealed that Joust plans to broaden its platform to borrowers with loan-to-value ratios (LVR) of over 80 per cent. 

“Our initial target audience was the high-credit quality, prime consumer, and we’ve had an excellent response from prime consumers, which has been our target audience,” the MD said. 

“However, we continue to get some interest and inquiries both from the banks on the supply side and from customers around potentially pushing out our LVR ratio maximums.

“At the moment, 80 per cent LVR is the maximum to be able to deal with Joust, but that would be one of the enhancements that we’d look at — potentially pushing that upwards so we can help more Australians.” 

Further, Mr Bevan told Mortgage Business that recent scrutiny of the mortgage industry from the financial services royal commission could present Joust with an opportunity to further highlight the value of its offering.

“Our internal view is that the royal commission will highlight significant concerns around a lack of transparency and a lack of real competition, and they are the key areas of focus for the Joust business model in terms of bringing significantly greater transparency and making it easier for consumers to actually obtain real competition tension,” the MD added.  

https://www.mortgagebusiness.com.au/breaking-news/12408-mortgage-platform-to-chase-low-deposit-borrowers

Adelaide fintech startup Joust seeking to raise $2m in Equity Crowd Funding

Adelaide fintech startup Joust is launching an equity crowdfunding campaign via OnMarket and is hoping to raise $2 million to rapidly scale the business.

The Joust platform, launched in 2016, links borrowers with more than 20 lenders who compete against each other to offer the lowest interest rate via a reverse auction process.

Using equity crowdfunding platform OnMarket, the company plans to spend a large portion  of the money raised on advertising, with the remaining funds to go towards product development, potential entry into overseas markets and building out the Joust team.

A minimum $700,000 is being sought as part of the capital raise, which allows retail investors to invest between $500 and $10,000.

Joust chief executive Mark Bevan said the equity crowdfunding model suited the company’s consumer focused brand.

“We’ve been watching the equity crowdfunding legislation progress in Australia for two years or so,” he said.

“If we were to raise $2 million from say 2000 investors, it’s highly likely that they will instantly have 2000 new customers and 2000 new advocates.

Joust’s existing shareholders include Adelaide Football Club chairman and former BankSA managing director Rob Chapman and NOVA Entertainment Group.

Mr Bevan said more than 2100 customers had used Joust since its launch two years ago, with more than $1 billion worth of prime home loans auctioned on the platform.

Joust’s crowdfunding campaign is currently open to pre-registered investors and via the attached link: https://www.onmarket.com.au/offers/joust-australia-limited/

The offer is expected to close on August 3.

https://australianfintech.com.au/adelaide-fintech-startup-joust-seeking-raise-2m-equity-crowd-funding/

Fintech startups threaten mortgage broking old guard amid royal commission heat

OPINION

April 16 2018

James Eyers

The emergence of fintech disrupters to the lucrative mortgage broking industry is being driven by three key dynamics. 

First, banks pay $2 billion a year in commissions to mortgage brokers for the delivery of home loan borrowers – but want to pay less. 

Second, the Hayne royal commission is investigating whether current broker pay structures create conflicts of interest and exploring better ways to serve customers. 

Third, technology is making self-service easier, and "open banking" will put customers in control of their data, including all the information required to make a mortgage application.

So enter the mortgage broking entrepreneurs and a bunch of start-ups ruffling the feathers of the powerful incumbents. 

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Take, for example, Hero Broker. It launched two weeks ago with a mantra to redirect the savings from its technology efficiencies back to customers.

Redundant role

Founder Clint Howen reckons under open banking, applying for a mortgage will be as easy as pushing a few buttons, to enable the necessary information to flow in the background. This will make the traditional broker's role of filling out and submitting application forms largely redundant. 

Even before open banking arrives, Hero Broker is using an automated application process to save customers the entire amount of the upfront commission currently paid by banks to brokers. This is typically about 0.6 per cent of the value of a loan.

The start-up has cut a deal with three major banks for them to pay a smaller amount than the traditional upfront commission directly to Hero Broker customers in the form of a rewards card.

Hero Broker receives the trailing commission, but in the future, this could become a flat fee, especially if the royal commission shifts the industry to a fee-for-service model. 

Broker backlash

Traditional brokers are angry; a YouTube video where Howen reads a selection of vicious tweets from paranoid members of the broking community worried his model will eat their lunch has been viewed more than 31,000 times. 

Many other mortgage fintechs are lining up to disrupt brokers. Uno, majority-owned by Westpac, has created a new digital mortgage broking brand. Tic:Toc, in which Bendigo and Adelaide Bank has a 35 per cent stake, has created a fast online application process. Macquarie Group-backed Lendi is another online mortgage broker. 

Moneycatcha's Homechain is a digital platform to manage the home loan process from application to settlement. HashChing is a platform for customers to find top rated mortgage brokers, allowing them to access lower rates. 

Customer-centric control of data is a key theme in the new business models. Lodex, for example, lets users set up a profile including a credit and social score, and gets lenders to come to them. Loan Dolphin, Joust Home Loans and recently-launched Loanbid have created marketplaces where lenders and mortgage brokers bid for customers. 

Mortgage aggregators like AFG and big brokers like Mortgage Choice and Aussie Home Loans have their work cut out to respond to these new models and adapt to the digital economy. 

The royal commission has put customers on notice that brokers' promises of more competition come at a cost. Howen is right that as technology makes it easier for customers to apply for loans and provide supporting data, a good chunk of the cost savings should flow bank to them.


Read more: http://www.afr.com/technology/fintech-startups-threaten-mortgage-broking-old-guard-amid-royal-commission-heat-20180413-h0yqp7#ixzz5Dpgzbwv8 
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New entrants turn up heat on Mortgage Choice and its mates

by Duncan Hughes 

  • Sep 17 2017 at 11:00 PM

It's still party time for residential property mortgage brokers, despite the gatecrashers and party poopers trying to grab the punch bowl.

Five years of record-low interest rates, soaring property prices and dazzling profits are attracting more new entrants to the market than bidders to a weekend Sydney harbour-side auction.

A new generation of clever mobile phone app providers are offering cheaper and faster deals, reducing the entire mortgage qualifying process from days to minutes for the right borrowers.

Commonwealth Bank of Australia, the nation's largest lender, wants to increase sales through its bank branches and tighten control over other channels through buying the remaining stake in Aussie Loans, a leading broker network.

Westpac Banking Group, the second-largest lender, is rapidly digitising property conveyancing, which is likely to be integrated into some form of online loan-to-home process.

Other specialist lenders are challenging mortgage brokers with sophisticated processing and lucrative mortgage rates.

Regulators keep turning the screws with limits on the amount and types of lending brokers can do, closer scrutiny of borrowers' ability to service loans and tighter credit controls.

That's increasing pressure on leading brokerages such as Mortgage Choice to come up with new strategies to remain competitive, and expand footprints by increasing franchises.

It's about 30 years since the Campbell Report encouraged the dusting of fusty banking regulations and opened the doors to specialist advisers ready to do the legwork for borrowers.

Big commissions paid by lenders for new business encouraged brokers to visit borrowers at home, or work, to help navigate them through some 30,000 different loan products on offer.

It also happily coincided with the decision by the major banks to reduce branch networks to cut costs and focus on the astonishing surge in internet banking transactions. Smaller lenders, without branch networks, also jumped on board the broking bus.

Brokerages grew from a cottage industry to a 6800-business powerhouse, as median Sydney house prices soared from $120,000 to about $1 million and increased more than 10-fold in Melbourne to about $900,000.

Brokers account for about 53 per cent of deals and more than $2 billion in annual commissions, or about $4600 per mortgage, which is about six times the cost of simple advice from a financial adviser, according to analysis by investment bank UBS.

The nation's hot spot, Sydney, is cooling, but demand remains strong in Melbourne, refinancing is very popular and first-time home buyers are re-emerging because of state government grants and tax concessions.

Mortgage Choice's share price and earnings growth broadly follow the fortunes of the property market, which means recent performance has been strong. For example, full year 2017 net profit after tax rose 10 per cent compared to the previous year, 30 new franchises were added and revenue is being diversified.

The company's share price is up 19 per cent in the last 12 months, but the stock has gently drifted down to $2.26 after hitting a recent peak of $2.57 in March.

Industry in flux

Now the broking industry is transfixed – or being transformed – by a debate about whether mortgages are a 'commodity', like a utility bill, or a 'service', requiring advice from a specialist.

Advocates of a 'service' claim research shows the vast bulk of property buyers need expert help on a financial decision likely to influence their lifestyle for decades to come.

Brokers offer their services to clients for 'free' and earn income from an upfront commission from the lender of about 0.65 per cent of the loan's value and monthly trailing commission of around 0.15 per cent.

Champions of 'commoditising' are opening the doors to a new generation of very clever mobile appliances that provide the best rate and recommend a bank or mortgage broker.

There are seven – and counting – providers offering variations on this service. They include flongle, Tomorrow Finance, loan dolphin, finder.com, lendi, Canstar and RateCity.

Each has competitive rates and solves different problems, such as linking a borrower to a broker, lender, or both. They take a smaller commission then the traditional mortgage broker, which enables the lender to rebate some of the savings back to the borrower.

Other new competitors, such as Tic:Toc Home Loans, claim to have digitised every step in property buying to reduce the time needed to approve a loan from 22 days to 22 minutes.

That includes free property valuation, credit and identity checks, assessment of borrowing capacity and validation financials, according to chief executive Anthony Baum, whose company is 35 per cent owned by Bendigo and Adelaide Bank.

Highly competitive rates

It targets more sophisticated buyers who have 20 per cent deposits with highly competitive comparison rates of 3.69 per cent for owner occupiers and 3.99 per cent for investors. Offset accounts cost an additional $10 a month.

Former bankers, such as Tic:Toc's Baum and Joust's managing director Mark Bevan, are typical of the digital disrupters with a new model they claim is cheaper, faster and – for some borrowers – friendlier.

"We are an absolutely a disrupter," says Bevan.

Traditional brokers, such as John Flavell, chief executive of Mortgage Choice, claim this debate has been raging under different guises for 25 years.

"Mortgages are not commodities," he says. "Financial services are more complicated than prices. This is about helping make a person make the right decision."

Mortgage Choice is a distant No.3 in the sector, with about 8 per cent market share, compared to Australian Financial Group with 24 per cent and Commonwealth Bank of Australia with 14 per cent.

CBA, the nation's largest lender, has bought the remaining 20 per cent of well-known Aussie Loans and is aiming to increase the volume of loans sold through its branch network. Other major banks will be watching closely.

Annual industry growth of nearly 7 per cent for the past five years is expected to nearly halve over the next five as the industry begins to mature.

The next move for the cash rate is likely to be up, which means record-low interest rates will begin to rise and squeeze household budgets and credit growth that has been growing three times the rate of inflation and incomes.

That will slow mortgage growth already hit by a ban on overseas' lenders and recession-ridden capitals, such as Perth and Darwin.

Read more: http://www.afr.com/personal-finance/new-entrants-turn-up-heat-on-mortgage-choice-and-its-mates-20170915-gyi1ci#ixzz4tBUZfjCV 
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Home loan disruptors boost competition for property borrowers

by Duncan Hughes 

  • Sep 14 2017 at 12:15 AM

Property borrowers are being offered new online tools that could make choosing a loan cheaper, faster and more efficient.

They range from a complete online lending service to websites that create a marketplace where mortgage brokers and lenders can bid for borrowers' business by offering the best rate and terms.

Tic:Toc Home Loans claims to have digitised every step in property buying to reduce the time needed to approve a loan from 22 days to 22 minutes.

That includes free property valuation, credit and identity checks, assessment of borrowing capacity and validation financials, according to chief executive Anthony Baum, whose company is 35 per cent owned Bendigo and Adelaide Bank.

Tic:Toc is authorised by the Australian Securities and Investments Commission.

It targets buyers that have 20 per cent deposits with highly competitive comparison rates of 3.69 per cent for owner occupiers and 3.99 per cent for investors. Offset accounts cost an additional $10 a month.

Lower fees

Borrowers pay only statutory fees, such as stamp duty, which means a saving of about $1500 in administrative costs.

"The way home loans are done is way out of date," says Baum. "We believe mortgages are like a utility, such as electricity, and that borrowers are looking for the lowest cost."

Other new digital offerings help borrowers find a mortgage broker, which acts as an intermediary between lender and borrower, or a loan that best matches the amount required and the borrowers' capacity to pay.

Joust Home Loans invites would-be borrowers to provide details online of their loan type, size and desired term on which 14 lenders can bid. They include Bank of Melbourne and St George Bank, part of Westpac Banking Corporation.

"The banks have people online bidding for the business," says managing director Mark Bevan.

Lenders pay about 20 basis points for the service, compared with about 95 basis points in upfront and trailing commission for mortgage brokers, he estimates. That means lenders should be able to rebate some of the savings to the borrower.

"We do not offer advice," says Bevan about the difference between Joust and a mortgage broker.


Read more: http://www.afr.com/real-estate/home-loan-disruptors-boost-competition-for-property-borrowers-20170907-gycqii#ixzz4tBW2MxOS 
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Adelaide start-up and fintech company Joust to launch in New South Wales under NOVA Entertainment Group funding deal

The Advertiser

February 20, 2017 10:45am

A MAJOR entertainment company has thrown its financial support behind Adelaide-based technology start-up Joust, allowing the company to expand its home loan auction service into New South Wales.

The Wakefield Street business today announced it had successfully raised another $400,000 and secured NOVA Entertainment Group as a strategic investor.

The company, which operates in SA and Victoria, says the funding takes to almost $2 million it has raised since its inception in early 2015.

Co-Founder and managing director Mark Bevan said 650 customers have used Joust to seek a better home loan interest rate and that the value of home loans “jousted” was already more than $250m.

“We now have eleven Banks on the Joust platform and the continued support from existing

investors and now NOVA Entertainment, gives us the confidence to expand in to the Sydney market next month,” he said.

Scaling the business and increasing consumer awareness in the important markets of Melbourne and Sydney are key focus areas for Joust in the first half of 2017.

Joust was recently named as a finalist in Start-Up of the Year category in the 2017 Fintech Business Awards.

click here to read the full article

Joust On A Roll

On the 23rd of August, Your Mortgage featured an article about Joust.

Joust Banking Wars

A start-up is on a roll after bringing in over $100 million in mortgage referrals in just its first quarter of operation.

Joust, an Adelaide-based financial technology start-up founded by managing director Mark Bevan and former banking colleagues Richard Hockney and Greg Abel, runs its business by pitting banks against each other or making them joust to bag client loans.

Customers give the details of their loan, and seven lenders then have the chance to put in their best offer for the client to choose from.Bevan said that Joust recorded 155 home loan opportunities in just its first month after launching in South Australia on June 1.

The start-up exceeded its target to refer 30 to 40 offers for its debut month.

“It’s been a really exciting start,” Bevan said. “We’ve been really thrilled with the response from South Australian consumers.”

Joust is now on track to expand to the eastern states. There is already a plan to launch Joust in Victoria by October. “We’re going to be adding a few Victorian-based banks and it will be a seven-month pilot in total,” Bevan explained. “All being well on the first of January, we expect to add some more banks and operate nationally.

Prior to its launch, Joust has also spent an estimated $400,000 developing its website and software.Investors like former BankSA managing director Rob Chapman are backing Joust’s operations. Local lenders such as BankSA, Adelaide Bank, and People’s Choice Credit Union are currently in Joust’s panel of lenders.

Click Here to go to the Your Mortgage website.

 

South Australian SMEs among winners in state budget with $10,000 incentives to hire new workers

ELOISE KEATING /Friday, July 8 2016

South Australian Treasurer Tom Koutsantonis. Source: AAP Image/Tim Dornin

Small and medium businesses in South Australia will receive cash incentives for each new job created in the next two years, as part of the state government’s efforts to tackle unemployment across the state.

The 2016-17 South Australian budget, which was handed down by Treasurer Tom Koutsantonis on Thursday, includes two incentive schemes for small and medium businesses, in a package worth $109 million.

The Job Creation Grant scheme will pay employers $10,000 over two years for each new fulltime job created between July 1, 2016 and June 30, 2018. The scheme is open to employers that are liable for payroll tax in South Australia and which have a total taxable wage bill of $5 million or less in the financial year immediately preceding the year they wish to claim the grant in.

Under the scheme, employers will receive the grant in two instalments to coincide with the first and second anniversaries of the creation of the particular job. If the hours worked by the new employee are less than 35 per week, the grant will be paid on a pro-rata basis.

The second scheme funded in the budget, the Small Business and Start-ups Grant scheme, is worth $4000 to employers over two years, and is available to businesses that have a total payroll of less than $600,000, which puts them under the state’s payroll tax-free threshold.

To receive the grant, a business must create a new job of at least 22 hours per week. The $4000 grant will be paid to employers in two instalments of $2000 on each anniversary of the job being created.

To qualify for either the Job Creation Grant or the Small Business and Start-ups Grant, employers will need to register the new employee with RevenueSA within 90 days of an employee commencing work.

Koutsantonis said in a statement on Thursday the government estimates the schemes will provide grants for 14,000 fulltime jobs across South Australia.

“Reaching that target in the current economic climate will be challenging but we need to do all we can to address the state’s high unemployment rate,” he said.

The unemployment rate in South Australia is the highest among all Australian states and territories at close to 7%. Koutsantonis said while there is more work to be done to improve employment opportunities in the state, these grants will “build on our tax reforms and stimulate further job creation in South Australia”.

“We want to reward growing businesses in South Australia and help them grow faster,” he said.

“We are backing SA businesses that want to expand and create more jobs.”

Mark Bevan, managing director of Adelaide-based startup Joust, told SmartCompanyhis company will factor the grants into their financial modelling and “it could be the difference between a ‘no’ decision and a ‘go’ decision” to hire a new employee.

“Hiring, particularly making a commitment to new full time employees, is a massive challenge for startups. Anything that reduces the financial risk I would consider very helpful,” Bevan says.

“Management of cashflow – and making sensible, small investments are a prime focus for small business and start ups.  A cash incentive can have the effect of tipping the risk scales of making an investment in a new employee or a contractor in favour of proceeding.”

BDO partner David Fechner also backed the measure, saying in a statement the grants schemes are good news for South Australia’s 90,000 small businesses.

“In a flat economy the state government has substantially shifted its approach to small business and is finally looking at this sector to create jobs and growth,” Fechner said.

“The incentives announced today are good news for those business owners striving to diversify their offering and stay relevant to their customers amidst shrinking margins and attempts to deliver more with less resources.”

Other measures to help SMEs in South Australia

The 2016-17 South Australian budget includes a number of other measures that could help SMEs. These include:

Payroll tax rebate extension

The SA government has extended the small business payroll tax rebate for another four years, which is claims will save eligible businesses as much as $9,800 each year. The rebate was first introduced in the 2013-14 state budget and provides a 2.45% rate cut for businesses with payrolls up to $1 million. The government extended the rebate for 12 months in last year’s budget and following the latest extension, it will now run until the 2019-20 financial year.

Access to faster internet

The 2016-17 state budget includes a provision of $4.65 million to make Adelaide part of the global Gig City network. This will involve giving businesses access to SABRENet, a high-speed, optical fibre network currently used by the state government and universities. The roll out of the Gig City network to Adelaide is expected to start at the end of the year.

Promotional support for retailers

The government will also provide $2 million for a 12-month campaign to encourage South Australians to shop with local businesses. The “Choose South Australia” campaign will be run by Brand South Australia and will aim to raise the awareness of South Australian made goods and services.

Funds to attract business to the state

The government has allocated an additional $20 million over two years to the South Australian Economic Investment Fund, which aims to attract new businesses to the state.

Cash for business advice and mediation

SMEs that export are expected to benefit from an additional $600,000 in funding for Business SA to provide a coaching and advisory program in this area. The Office of the Small Business Commissioner will also receive more than $1 million to fund mediation services.

See original article here

Joust is becoming the logical way for good customers to get a new home loan

It was a fantastic opportunity for Joust to join three of Australia’s most disruptive businesses at the Disrupters event held in Adelaide last week.  It was inspiring to hear from leaders of other Disrupters  Uber Vinomofo and Expre3ss.  It was also an opportunity for Joust to share with the crowd of nearly 200 business people, that more than 120 South Australians had  “Jousted” approximately $55m worth of home loans in just three weeks.

The energetic audience was eager to hear about the start-up journey and understand the challenges.  As part of the Disrupters panel, we were able to reflect on what we did right, highlight some of the mistakes made along the way and share our most valuable advice.  

The exciting thing for Joust is that consumers have quickly identified with the Joust value proposition and the convenience, transparency and empowerment of the Joust process for obtaining the best possible home loan interest rate.  Just as Uber has become a phenomenally successful alternative to taxis worldwide and Vinomofo are successfully taking on the world by creating a tribe of followers in the wine business, Joust is poised to lead a revolution in retail lending – starting in Australia.   From the convenience of the couch at home, or the train ride to work, consumers with a good credit rating and good equity in their homes are able to create their own “Joust” and watch as lenders bid against each other, live, straight back to your mobile phone, tablet or computer.

Thanks again to In Daily and Bernadette Schwartz see here for hosting such a fantastic event. Also a big thanks to Expr3ss for arranging the delectable Rocky Road treat from iconic SA business Haighs, which our family thoroughly enjoyed. 

Joust Managing Director, Mark Bevan

Analysis: Is the mortgage industry ready for disruption?

Wednesday, 22 June 2016   |  
 
James Mitchell

Fintech businesses have descended on the mortgage market in recent months, eager to establish themselves as legitimate distribution channels. But are banks and brokers ready to embrace new players?

Hero BroKer

When The Adviser ran a piece about Hero BroKer last month, the industry’s reaction was significant. Twenty-five people commented on the story, which was shared 64 times on Facebook and 48 times on LinkedIn. 

The idea that customers could broker their own home loan (and receive an upfront commission for doing so) seemed to fly in the face of the broker proposition.

Comments ranged from encouraging – “A work in progress that will face some hurdles but I'm looking forward to seeing how far Hero BroKer will go” to negative – “My bet is Hero to zero!”

A follow-up story revealed that the platform had signed an agreement with mortgage aggregator AFG.

However, Heritage Bank seemed confused after being told its branding was all over on the Hero BroKer website.

Heritage Bank’s general manager of retail services Paul Francis said he was unaware Hero BroKer had listed the bank as a lending partner on its website, adding that Heritage has no direct agreement with the platform.

Mr Francis said he does not believe the platform will make much of a dent in mortgage distribution now, but it could in the future. “There will be more of these types of operations that will be banking on the fact that this continued move to the digital age will become prevalent in this part of financial services,” he said.

A few weeks later, AFG revealed that it had terminated its agreement with Hero BroKerfollowing a review of its business model.

Hero BroKer founder Clint Howen said AFG’s main concern was the commission going back to the borrower.

“If I was to give that up from the business model, they would want to continue their relationship with Hero BroKer,” Mr Howen said.

“But it’s not just the commission [going] back to the borrowers that they’re worried about either. They’re also worried that the process could take away the value of a broker.”

Which poses the important question: is the industry ready to be disrupted?

Non-bank lenders were an early disruptive force in the mortgage market, as were brokers. Together they have been responsible for injecting much-needed competition into the industry.

Whether new online players can deliver the same positive results remains to be seen.

Mortgage Business understands Hero BroKer has been in discussions with more aggregators in recent weeks.

Uno

Within days of AFG cutting ties with Hero BroKer, industry veteran Vincent Turner announced the launch of his new fintech company uno. Once again, the power is in the hands of the consumer.

The uno online service gives consumers access to the same tools and information traditional brokers use to find a home loan, providing them with the power to decide what is best for them. It also allows consumers to access real time home loan rates based on their personal situations – not just advertised rates.

“We think of this as the third wave. Traditionally, you’ve just had banks, going way back. Then you had brokers come into the market. We see this consumer-brokered mortgage as the next wave of what is possible,” Mr Turner said.

“I think there is a whole segment of consumers who will say, ‘This is how I want to get access to a mortgage because I want to use a platform’. They don’t want to do it alone, they still want help, but what they want is a screen.

“There is a whole generation of people who have a screen to access so many other services in other verticals.”

Mr Turner believes online platforms such as uno will not replace banks, nor does he see it replacing mortgage brokers.

“We think there is a whole generation of people and a growing segment of the market who want to do more of this themselves and expect that from their service providers.”

Mortgage Business understands a big four bank has recently invested in the platform.

Joust

This month, another new player announced it has gained traction in the home loan market. However, unlike the consumer-brokered model, Joust sees lenders bidding for a customer’s mortgage.

In its first two weeks, Joust has seen more than $43 million worth of home loans go through its system after more than 100 customers put their mortgages up for auction.

Joust founder Mark Bevan has made clear he is in competition with mortgage brokers, and so far a growing number of non-major lenders have signed up to the South Australia-based platform, including Bank SA, Adelaide Bank, Australian Unity, People’s Choice Credit Union, Bank of Queensland, Beyond Bank and Gateway Credit Union.

Mr Bevan said Joust will launch in Victoria in October, followed by a full national roll-out by January 2017, with plans to more than double the number of active lenders on the platform.

“We’re aiming to have up to 20 lenders on our digital platform to ‘joust’ by the time we launch nationally, which given the discussions and high level of interest received to date, we are confident this goal is well within reach,” he said.

The former major bank executive believes one of the reasons people are responding so well is the fact that Joust is not a comparison site, but a live and fully transparent auction platform.

“It’s a reverse eBay experience for home loans. There’s a lot of confusion when it comes to comparing home loan deals between lenders, and people don’t have the time or patience to do the hunting around and negotiating back and forth – and certainly not with numerous lenders,” he said.

“Our platform brings a new competitive edge to the financial sector, whereby we bring the lenders to the consumer on our terms, ensuring apples are always being compared with apples, which makes the process much easier for the consumer.”

Three local fintech companies have emerged in recent months. All of them have the same goal – to earn their place in the competitive mortgage distribution market by catering to the changing needs of consumers.

The rise of mobile technology and the rapid take-up of internet banking have placed the power firmly in the hands of customers.

There will always be people who will want their hands held and who will look for a human relationship when they are making major financial decisions. But there is a generation of customers (and generations to come) who is quite happy to receive a mortgage in a few simple steps on a screen.

Just as mortgage brokers and non-bank lenders brought competition to the market by offering an alternative, new online players will no doubt be the catalyst to drive innovation in both new and existing mortgage businesses.

This article first appeared in Mortgage Business 22nd June 2016 - click here

 

 

ASIC Supports Aussie Start-ups

The world of regulation, especially in the financial services sector can be very daunting.   At Joust we have a philosophy that nothing is more important than compliance therefore we will not take any shortcuts.  In 2015, when we were trying to come to terms with our compliance obligations and the rigour involved with obtaining an Australian Credit Licence, we reached out to the ASIC Innovation Hub and they could not have been more helpful and supportive.

 

Very strong governance of the Australian financial services industry has served us well through many tough economic cycles, including the Global Financial Crisis.  The benefits of this compliance culture can be seen every day and the greatest endorsement is the strength of our banking system, which is the envy of most other nations. 

At Joust, our formal lender agreements were prepared by premium commercial law firm Laity Morrow. These agreements have now been extensively reviewed by a range of internal and external legal teams at eight financial institutions.  Joust continues to build a strong and sustainable business model where the guidance and assistance offered by the ASIC Innovation Hub was not only instrumental in Joust securing our Australian Credit Licence but also helped us understand our obligations and the broader regulatory environment. 

I have no hesitation in recommending the ASIC Innovation Hub to any other Australian Start-up, especially one participating in the fin-tech space, 

Joust Managing Director, Mark Bevan

 

New disrupter hits the mortgage market

Joust, the latest disrupter to hit the home loan market, has launched a live auction platform – providing consumers, in essence, with a reverse eBay experience for mortgages.

The home loan contest - which allows customers to secure low interest rates by having lenders bidding for their business - has seen home loans valued at more than $45 million being put up for live auction in just a few weeks.  Launched on 1 June in South Australia, Joust will enter the Victorian market in October followed by a full national roll-out by January 2017.  “The platform - which involves lenders bidding for the loans in real time - allows customers to watch as lenders drive down each others' rates within the chosen time frame," commented Joust managing director, Mark Bevan. 


After pitching the product for 18 months, he found converts chiefly among the challenger brands as it gave them an opportunity to target specific customer segments.
 

Challenger brands


As such, Bevan has signed up seven second-tier lenders, including Bank SA, Adelaide Bank, Australian Unity, People’s Choice Credit Union, Bank of Queensland, Beyond Bank and Gateway Credit Union.  And, he has plans to push that number to 20 by the time Joust rolls out nationally, which given the discussions and high level of interest received to date, he is confident in predicting. "The challenger brands will always find it hard to compete digitally with the big banks," he argued, adding that their resources were stretched.


“Our mortgage origination platform costs the challengers very little and yet they get highly-qualified leads that allow them to target specific client niches,” Bevan said. “They can see the geography, the demographic, the loan-to-value ratio, the credit rating band - these are all things that we provide.” As he sees it, the platform is a real alternative to the use of mortgage brokers for the customer-owned and smaller regional banks - which are struggling to achieve reach.
 

'Chunk out of the value chain'


Bevan is convinced that digitalisation of the mortgage process will completely change the customer experience, forcing more and more brokers into the advice and financial planning area.  “The old style broker business that takes a chunk out of the value chain for straightforward home loans will find it harder to justify this as technology improves,” he added. His goal is to bring a new competitive edge to the financial sector, by bringing the lenders to the consumer - and putting consumers firmly back in the driving seat. Additionally, he has been in talks with the big four banks but so far has been unable to land any of them as clients. “While impressed with the concept, our platform represents a threat to their back book so it's unlikely the major banks will jump on board," he said. 

Joust charges 20 basis point for mortgage origination and charges the lender’s a fee for using the software. That charge is based on each deal introduced to them. Unlike Flongel - which also offers mortgage auctions via a platform - Joust offers no advice and does not make recommendations. “We just create the platform and the direct link with the technology for the banks to bid in a live and dynamic environment so each lender can see each other's bids."

Categories
BANKING, TECHNOLOGY,
Author:
Elizabeth Fry, efry@financialpublications.com.au
Article Posted:
June 21, 2016

click here

Brokers losing mortgages to disruptive platform

WRITTEN BY
James Mitchell 

June 20, 2016

A new online lending platform that competes with mortgage brokers has seen more than $43 million worth of home loans put through its system in its first two weeks of operation.

Joust is a free tool that involves lenders bidding (jousting) for home loans in real time, allowing customers to watch as lenders drive down each other’s rates within a specific time frame.

During the first two weeks of its launch in South Australia, more than 100 consumers put their home loans up for auction onJoust, three times more than the company had anticipated.

Online lending platforms are becoming increasingly prevalent in the home loan space, bringing fresh competition and challenging the traditional bank and broker propositions.

Seven lenders have already partnered with the South Australia-based platform, including Bank SA, Adelaide Bank, Australian Unity, People’s Choice Credit Union, Bank of Queensland, Beyond Bank and Gateway Credit Union.

Joust managing director Mark Bevan said one of the main benefits to banks is the complete lack of channel conflict, as Joust is not looking to ‘own’ the customer or the relationship.

“We would hope to take some business away from mortgage brokers,” Mr Bevan said.

Joust has targeted challenger brands rather than the big four. According to Mr Bevan, the start-up has seen the strongest engagement from non-major lenders and mutuals.

Mr Bevan said Joust will launch in Victoria in October, followed by a full national roll out by January 2017, with plans to more than double the number of active lenders on the platform.

“We’re aiming to have up to 20 lenders on our digital platform to ‘joust’ by the time we launch nationally, which given the discussions and high level of interest received to date, we are confident this goal is well within reach,” he said.

The former major bank executive believes one of the reasons people are responding so well is the fact that Joust is not a comparison site, but a live and fully transparent auction platform.

“It’s a reverse eBay experience for home loans. There’s a lot of confusion when it comes to comparing home loan deals between lenders, and people don’t have the time or patience to do the hunting around and negotiating back and forth – and certainly not with numerous lenders,” he said.

“Our platform brings a new competitive edge to the financial sector, whereby we bring the lenders to the consumer on our terms, ensuring apples are always being compared with apples, which makes the process much easier for the consumer.”

This article first appeared in The Adviser 20th June 2016 click here

Learning from our customers

I expect that anyone who has worked with a large Bank or Financial Services business is very familiar with the term Continuous Improvement Program.   My sense is that these programs have been very prevalent in the finance industry for more than a decade.   When we formed Joust in early 2015, I assumed that I had probably been part of my last Continuous Improvement Program.   Little did I know that from the moment Joust went “live” with our “pilot” in South Australia on 1st of June 2016 – we would be embarking on a permanent Continuous Improvement Program.   We undertook a lot of research, design and testing of the Joust platform but there is nothing like learning from our customers.  Constructive feedback from our customers has been offered immediately and it really is greatly appreciated by any start-up business.  The Joust team is doing its best to learn from customers who give Joust a try and those who take a look and elect not to proceed.   One of the beauties of Joust is that it is obligation free and only if you declare a winner of your Joust, will the winning lender be able to contact you.  This means that many consumers have been able to take a close look at the Joust experience for new home loans and refinancing existing home loans without fear of being harassed by pushy Brokers or Bankers.

We have been rapt with the response from consumers in the first week of our pilot.   Many have jumped straight in and are already receiving ultra competitive bids from our panel of lenders.  Even consumers with more complex needs are telling us how much they like the Joust business model.  It is important to refer to the “Is Joust for me” section of our website – to understand our audience.  Many consumers are registering their interest to be advised if Joust expands our product offering and many customers are telling their friends and family about us or following us on Facebook.

One thing is certain, Joust will continue to seek out feedback from our customers and strive to improve our platform on an ongoing basis.   It seems Joust is on a continuous, Continuous Improvement Program.  The joys of being a start-up business.

Joust Managing Director, Mark Bevan

The top 6 reasons why it is no longer too hard to refinance your home loan

I was having coffee with the CEO of one of the larger Melbourne based financial institutions early last year.  I was talking to him about our ambitions for Joust and he said something that really resonated with me.  He said “Housing Loans are NOT complicated.  If a house is worth $800,000 and a customer has $400,000 of equity – the customer needs $400,000. “

Banks get involved in lots of complicated transactions and products but the basic home loan, should not be one of them.  Home loan opportunities such as the one the CEO described above are absolute “gold” for Banks.   They often take a minimum amount of credit assessment, carry a minimum amount of risk, Banks are excellent and well set up to do the fulfilment and there ought to be ample opportunity for Banks to offer other products to the new home loan customer.

However, until now, it has been a bit daunting and/or confusing for consumers to know where to start to try to find out if they could get a better home loan interest rate.  The top six reasons until now are described below:

1)      I haven’t got time.   Many of us don’t have the free time to undertake the research, analysis and negotiation required to refinance our home loan.  Comparison sites are a maze of brands, packages, specials and numbers.  Sometimes you feel like you would need a science degree to work out what it all means.  Approaching a Mortgage Broker to do all this research and negotiation on your behalf, sounds fine but the lack of transparency around Mortgage Broker recommendations continues to be a concern in the home loan sector.  Media coverage and public enquiries continue to draw attention to these challenges.

2)      Where would I start?  Unless you have a terrific Relationship Manager at one of the Banks, or a close friend who is a Mortgage Broker or an Accountant, it is not obvious where a customer should begin the process of refinancing their home loan to reduce their monthly loan repayments.  More and more, people are turning to the internet to commence their journey for goods and services.  Researching home loans can be almost an infinite process if you don’t know where to go.

3)      I don’t want my personal details shopped all over town.   Many consumers are understandably sensitive about their personal data.  Whether it is filling out forms with Banks or Brokers or keying in data on-line, consumers want to know that their personal data will be protected and always handled and used only in the manner that it was intended.

4)      I don’t want to be hassled by Banks or Brokers phoning me and emailing me incessantly.  One of the draw backs of beginning the enquiry process for a home loan refinance – is that in a lot of cases, as soon as a service provider gets a sniff that you might be intending to do something – they bombard you with unwelcome phone calls and emails.

5)      I actually don’t enjoy bartering or haggling.   Many Australians don’t enjoy the “argy-bargy” of negotiating with lenders or brokers for a better deal.  It can feel a bit unnatural for many of us and creating the right level of competitive tension often involves a degree of unwanted pressure.

6)      How can I trust a middleman to truly get the best rate for me?   Without competitive tension, lenders tend to apply their own standard rates to all home loans.  With many financial institutions, one person gets exactly the same home loan interest rate as the next person – despite the fact that the person’s credit rating, income, equity, occupation or location of the property may be very different.  Mortgage Brokers have been telling us for many years – it is unlikely that a Bank will contact you and say – “hey – we could give you a lower home loan interest rate.”   However the preferences and opinions of a mortgage broker may not always be in your best interest, and various incentives may direct them down one path or another that is not always fully transparent.

But all is this is about to change for the better.    Joust takes approximately 3 minutes to input the details of your existing home loan.  Joust is now the logical place to start for all good consumers with an existing home loan.  Your personal details are only provided to the ONE winning lender that you select at the completion of your Joust.  No one other than the lender you have selected will follow you up by phone or email.  Joust creates the competitive tension across its panel of lenders – instantly and live.  With Joust – there is no intermediary, lenders are bidding for your business directly to your mobile phone, tablet or computer.

Joust Managing Director Mark Bevan