The Australian Prudential Regulation Authority (APRA) gives Alex Bank the green light to offer banking services and accept deposits.
Alex Bank has been granted a licence to operate as an authorised deposit-taking institution (ADI) by the APRA.
The ADI licence will determine Alex Bank as an official banking business in Australia. More specifically, it will enable the bank to accept deposits within the bounds of the Banking Act of 1959.
The bank is applying its newfound licensing in the expansion of its product suite. This includes term deposits, which will join its personal loan and savings account.
To support its product and growth strategy, Alex Bank retained a focus on developing its broker partnerships during 2022 and now has access to the majority of brokers in the market.
This comes just 18 months after it received its restricted ADI licence. The APRA introduced a fragmented and phased approach to its licensing processes to encourage competition and new entrants within the banking market.
While the ‘direct pathway’ is preferred for applicants with the existing infrastructure to establish an ADI, it was the parallel ‘restricted pathway’ Alex Bank opted for in its application. As a result, the bank has operated under its restricted license for the past 18 months.
This allowed it to conduct limited banking business while it simultaneously prepared its operational model to meet the full prudential framework. This alternative pathway affords applicants a maximum of two years to prepare their ADI resources.
Becoming an ADI
The bank wrote to the APRA in November 2022 to have the imposed conditions of its restricted license removed. The APRA ultimately terminated the conditions on 21 December.
Above all, Alex Bank’s evolution demonstrated to the APRA that this was the right decision. From its humble beginnings as a hopeful start-up, the bank now currently supports 2500 customer accounts with offices in Brisbane and Sydney.
“During the past three financial years, our revenue has grown by a compounding annual growth rate of 717 per cent,” reveals the bank’s CEO, Simon Beitz.
At this time, Beitz joins a highly credentialed board and executive team which includes various banking and technology sector veterans.
With the wind in its sails and amid the glow of the APRA’s green light, Alex Bank remains a welcomed addition to Australia’s prospering banking market.
