Cashwerkz (ASX:CWZ) bringing banks and investors closer together


by Rachael Jones

Cashwerkz Limited (ASX:CWZ) Executive Director, Craig Swanger talks about the company's platform, the benefit it provides for both banks and investors, FY19 results and outlook.

Rachael Jones: Hello, I'm Rachael Jones for the Finance News Network. Joining me today from Cashwerkz (ASX:CWZ) is director Craig Swanger. Craig, welcome to FNN.

Craig Swanger: Thank you Rachael.

Rachael Jones: Now Cashwerkz provides a platform for advisors and retail investors to access cash from a number of banks. How's progress?

Craig Swanger: We find ourselves in the middle of three of the biggest trends impacting finance for a long time. Interest rates are at record lows. At the same time we have the baby boomers well and truly into retirement phase. They depend on interest rates for their weekly income, so they need to be able to find every last bit of interest that they can. Our platform offers a better choice and more competitive interest rates as a result.

Let's use an example. Our average client has about $300,000 on our platform. And if we were to look at either the three or the six month interest rates, which tend to be the most commonly used, the difference between the big four right now and the best rates on our platform is about 60 basis points, so 0.6 per cent. So, for one of those clients, that's $1,800 a year in additional interest simply by going onto our platform and finding the most competitive rate at that time.

The second of the big trends is more scrutiny on our entire financial services sector, particularly since the royal commission. So, financial advisors need to show best interest duty. They need to show that they have found the most competitive rates available for their clients. Super funds need to show that they're earning the most interest that they can, the highest returns that they can. The government has said that they will not tolerate low performing super funds and super funds can use our platform as well.

The third large trend really comes from that highest scrutiny on finance, which is much more competition in our banking sector. So, we've seen the rise of neo banks, new banks entering the sector, digital only banks that are offering more interest or higher interest rates as a result of their need to compete. At the moment, very few retail investors and advisors in particular know that these new banks are coming to market and know that those more competitive rates are available. So, as a result of that, so far we've seen $3.2 billion go through the platform and there's an active $1 billion on the platform and that's only with one full year of operation so far.

Rachael Jones: Thanks Craig. Now before we talk about the business in more detail, what is the size of the market and what's the opportunity there?

Craig Swanger: There's about $2 trillion in deposits in Australia as a whole. Now remember that's just the Aussie market. We can talk more about the global market later, but in Australia about $2 trillion. About half of that is with households and the other half is with businesses. Interestingly with households, about three quarters of the money sits with the big four banks alone. We have 49 approved deposit institutional banks on our platform, so much wider range and as a result, more competitive interest rates available than what people are accessing at the moment.

Rachael Jones: Now to your financial 2019 results, what were the highlights there?

Craig Swanger: 38 per cent increase in revenue, which comes from that increase in flow that we saw through the platform. Just as importantly, given the size of the market overall, we invested a lot in features such as connecting to the Praemium platform. Praemium is one of Australia's largest financial advisor platforms. About a $140 billion under management, they now have access to the wide range of choice of deposits, meaning again, those advisors can display best interest duty by accessing Cashwerkz through the Praemium platform.

Rachael Jones: And to the last question now Craig, where would you like to see the company in 12 months time?

Craig Swanger: I think with a much broader awareness in the community of what it is that we offer. Cashwerkz has been the quiet achiever for the last few years as it's built out its technology. I've only come on very recently, but the reason I joined and the reason that I'm a big supporter of Cashwerkz and have been for years, is it really offers a much broader choice and transparency for investors and that's what the digital economy is about. So, we need to tell that story more and more with more partners and more investors over the next 12 months.

Rachael Jones: Craig Swanger, thanks for the update.

Craig Swanger: Thanks Rachael.