Novatti Group Limited (ASX:NOV) CEO, Peter Cook talks about the company's 1H19 results, growth in transactions processing and range of processing solutions, and provides an update on Novatti becoming an ADI (authorised deposit-taking institution).
Anna Napoli: Welcome to the Finance News Network, I’m Anna Napoli and joining me now from Novatti Group Limited (ASX:NOV) is CEO, Peter Cook. Peter, welcome back to FNN.
Peter Cook: Good morning Anna.
Anna Napoli: Novatti Group is a financial transactions processor and developer. Can you tell us more?
Peter Cook: Novatti develops technology, very specific fintech solutions for both our third party customers and our own financial services networks. Most of our focus is on deploying financial transaction networks, primarily for cross border payments from Australia out. And inbound to Australia for specialised services, such as international bill payments, person to person remittances and general cross border payments.
Anna Napoli: Now to your first half 2019 financial results. What were some of the highlights?
Peter Cook: So revenue grew to $3.8 million, that was up 70 per cent on the light period finishing December 2017. Most importantly transaction revenue, financial transaction revenue, grew to just over 50 per cent. And in the prior similar period, it had been about 2 per cent.
Anna Napoli: When you last spoke to FNN, I believe that you were focused on becoming an authorised deposit-taking institution, or an ADI. Is that still a priority?
Peter Cook: Yes, very high priority for the company. We’ve brought on a team of about 13 specialised banking executives, who have formulated and lodged an application with APRA for a restricted ADI. We lodged that in November 2018. And currently we’re in the review process with APRA, as they work through our business plan and risk management plan, and technology plan and so forth. And hopefully, all leading to the awarding of a restricted bank licence.
Anna Napoli: Can you explain more about the target market for the proposed bank and the business plan?
Peter Cook: The target market for the bank is actually very much the segments we already work in. Primarily migrants, who are interested in new bank accounts in Australia, cross border payments such as remittances into Australia, or remittances back home to family members. We hope to give them new services, their transaction banking and finaling their lending services, when they’re in Australia. In terms of the business plan, we look at revenue segments from transaction banking, from remittance services, from lending. And in particular from correspondent banking, where we do cross border interworking with foreign banks.
Anna Napoli: Last question now Peter. Are you a high growth fintech digital bank play, or both?
Peter Cook: So right now, we actually happen to be both. We’ve been growing our financial transactions processing at a very strong rate, quarter on quarter. And as such, we are a fintech company that has both tech and financial processing. And we’ve also actually got licences, an AFSL and an AUSTRAC remittance network provider registration.
Separately, we’ve been bringing through the bank licence and leading up to APRA currently reviewing it, and hopefully we get approved for the digital bank licence. The digital bank licence logically follows on from the financial transactions processing, as the customers that we’re bringing on for the processing, will all be the future customers of the bank.
Anna Napoli: Peter Cook, thank you for the update.
Peter Cook: Thanks Anna.