Does Aotearoa deserve better when it comes to Fintech?

February 27, 2024
Logan Hodgson

Octave’s mission is to be the most interesting and innovative digital agency in Aotearoa, and with our teams banking, digital and data background, FinTech is our natural place to play. Recent progress in Open Banking is about to make things a lot more interesting and useful for customers in Aotearoa.

FinTechNZ  Hui Taumata is happening this week, and we’re looking forward to attending with our client partner, Invoice Hub. Invoice Hub is set to hit the market in a few weeks with the simple mission of making it easier for businesses to access short-term working capital via a lending marketplace.

At the FinTechNZ Hui, we're looking forward to hearing more about Open Banking developments in the UK and around the world. The UK is several years ahead of us, so we’ve got the opportunity to learn about what has worked and what hasn’t. Open Banking makes it easier and safer to access customer’s transactional records and develop innovative payments and banking solutions.

One example of where NZ needs to play catch up is online payments. Credit and Debit Cards are safe and secure, but they are relatively expensive for merchants. The main alternative is Poli, which requires you to enter your internet banking login details into a merchant website. This offering is unsupported by NZ banks, but in the absence of options, major organisations like Air NZ offer it to their customers.  NZ is crying out for better alternatives that are more secure and cost-effective for both merchants and consumers, and Opening Banking will make this easier. It's also great to hear the banks are getting on board.

It is encouraging to hear the Commerce Commission urging the payments industry to foster innovation and offer Kiwis diverse payment options, emphasizing the need for more efficient transfers to reduce reliance on cards like Visa and Mastercard. The Commission proposes regulatory support to encourage innovation, particularly for small businesses facing high card payment fees, and may even recommend regulatory intervention to expedite innovation. The Commission aims to facilitate API-enabled payments for faster, secure transactions between bank accounts. We are proud of our partnership with Payments NZ to support this mahi.

Another area NZ needs to play catch up in is making it easier for businesses to manage their working capital. Like the example above, there are very few options for businesses to access short-term finance when they have a temporary shortfall.  For a business that needs to make payroll in a couple of days, a bank will often take too long and the only alternatives are friends/family or an expensive sub-prime lender.  That is where Invoice Hub steps in. Invoice Hub is a digital platform that connects businesses with lenders and provides short-term finance. An outstanding invoice is used as security. The platform completes ID and AML checks and provides all the information required for a lender to make a quick decision. The goal is to get a wide range of lenders using the platform so businesses can receive competitive offers (and terms) in real-time.

As well as Invoice Hub, in 2023 we worked with Indi (NZ’s first digital-only home loan offering) and Turn Up (a data-driven tool to make it easier for merchants to manage their stores).  We also worked with some banks and insurance providers to improve their digital offerings.

Looking ahead, we will no doubt come back from the Fintech Hui with plenty of new ideas and new relationships. 2024 is shaping up to be another big year for FinTech. We’re looking forward to partnering with start-ups and established players to solve tricky problems and find innovative ways to improve digital experiences.