00:00 Introduction

Welcome to Give It A Nudge Season 5. Today we are very happy to have Peita Piper from Avenue Bank joining us. I’m the CEO of Avenue Bank. We’re a brand new bank in market. We launched four weeks ago. We were established 4.5 years ago, so it’s a very very long process to become an unrestricted bank. We’re the first and only bank to specialise in bank guarantees.

02:00 What a bank guarantee is

Bank guarantees are required to secure commercial leases, be it retail, industrial, office leases. They’re required by businesses and they are an absolute pain to get traditionally. We’ve reinvented the bank guarantee process. Typically it takes for traditional banks between four and six weeks. It’s paper based, it’s painful. It’s a product that hasn’t been looked at in over 85 years.

We’ve made it digital. Our customers from what we’re seeing are taking between seven and eight minutes to complete the application. We do that then all the identification online, no PDFs, none of that. And then we do a simple credit check. Because we hold 100% of the cash, we don’t do a long-winded credit assessment process. Once you deposit the money, we promise 24-hour bank guarantee issuance.

10:00 Peita’s background

I’m an engineer by profession, started with Accenture really in my career in strategy consulting. Through Accenture I came across one of the early CEOs of Ubank back then. I think I was the fourth employee of Ubank. So I had the opportunity to start a bank, very different from the Avenue story because we had a licence and were funded by NAB. This time around it’s been a really challenging journey in the equity markets and the long protracted licensing process. It’s been challenging, but we’re over the starting line now.

14:00 How Avenue Bank was founded

The founders Colin Porter and Dale Hurley owned CreditorWatch and identified through that business that they were looking to move premises and the bank guarantee process just took too long, six weeks, and held up their lease commencement and locked away millions of dollars. They were like, this is crazy, there’s got to be a better way. They founded Avenue Bank. They didn’t even know they had to be a bank to solve the problem. And then they realised that. At the time APRA had announced the new restricted ADI pathway so they applied and a short five years later here we are.

18:00 COVID, moratorium and regulatory rewrites

Short way into our journey COVID hit and APRA put a moratorium on the issuance of any new banking licence for a period of 18 months. So we’re a pre-revenue business trying to go through a licensing process and the regulator was pens down. During that period they were rewriting the framework so the game was changing as we were trying to play it. Capital milestones changed. You’re dealing with moving targets. There would be points where we had to have certain capital milestones which would change.

Looking back it’s remarkable really. It’s a testament to the resilience of the team, the shareholders, and the board. You just put one foot in front of the other, but looking back the history is remarkable. And it’s really important to have a very crisp clear strategy and alignment with your shareholders, the board, and the team.