Volt Bank BaaS partmer Justin Xiao, COO of Railsbank
Home loan refis in two or three days is the KSP of Volt Bank as it crashes into mortgage funding, and not the only one.
The Bendigo Express mortgage product, Tic.Toc AI, is the benchmark in home loan funding and settlement, and Volt Bank may be a new benchmark.
Volt has a deposit book of A$87 million and in “two to three months” will have a mortgage book of $50 million, Steve Weston, the CEO, told Banking Day.
Weston needs to be lending $50 million a day to approach the $20 billion mortgage book his successors will need to be taken seriously.
For now it’s a family and friends round mediated through a couple of finance brokers Weston did not name.
“Brokers have the best interests duty,” Weston said, but it is Volt that must excel in credit.
Railsbank is now front and centre as a strategic partner of Volt Bank and mission critical to making sense of its Banking as a Service proposition.
And there’s a ton of demand, paraphrasing Weston.
“The embedded finance market in Australia is in its infancy, but both Railsbank and Volt believe it is set for rapid growth over the coming years,” the former said in an announcement on Friday.
Justin Xiao, COO of Railsbank, Asia Pacific, said: “Australia is strategically important for Railsbank and it’s a real privilege for us to be partnering with Volt in this next phase of our growth. The strength of the Volt brand, balance sheet, and compliance offering makes it the ideal partner to help us launch into the local market and tap the growth opportunity in embedded finance.
“Australia’s fintech scene is vibrant and Railsbank has a lot to offer in terms of bringing innovative solutions and best practices to customers. Collaborating with Volt gives us access to local knowledge and capabilities to help us succeed. This is a significant partnership for Railsbank as we continue our expansion in the Asia Pacific region.”
Weston, said: “Railsbank has a proven track record of servicing millions of customers through partnerships with banks like Volt in global markets. This partnership demonstrates our prudent and measured approach to market entry.
“Built on the sturdy foundation of our unique BaaS platform and partnership strategy, Railsbank could help to make Volt a long-term contender for a share of Australia’s lucrative banking sector.”
Steven Weston and Volt Bank are still around, still making their own stories and one pandemic later are doing what they said they would do.
Volt have a ‘not too much nonsense’, resilient and plausible story to present to the equity and capital market. And no profits, which is where mortgages come in.
On the equity side of things and capital raising schemes, Volt’s been forced to be pragmatic and it’s looking for serious licks of equity.
Rolling out mortgage product and making it rock and funding 30 per cent or 70 per cent or all of it via deposits, this is always a hot topic. Volt will be dependent on access to wholesale funding running into the billions range in no time if they are serious.
The vast sums in equity capital Volt needs and stands a chance of collecting needs to be part-funded, even majority-funded, from retained earnings.
This means the pricing of the home loan product is all, sliding Volt to the high-priced end of Weston’s chosen spread of interest rate and product comparators.
“What’s the rate?” we of course asked.
“It’s in-market” Steve Weston told us.