(11 February 2025 – Australia) AMP is launching its new online business bank targeting small businesses, a segment of the market the group believes is overlooked by incumbent bank majors.
AMP states that its new app-only digital bank is designed specifically for small business owners including micro businesses, ‘solopreneurs’ and side-hustlers. This marks a significant milestone in AMP’s digital transformation journey following its earlier announcement of a strategic partnership with Engine by Starling, the SaaS subsidiary of UK’s Starling Bank. The project investment totalled approximately A$60 million across FY24 and FY25, absorbed within AMP’s current controllable cost targets, with A$40 million capitalised.
“What we’ve launched with is really a whole new digital banking offering. And at the moment, it’s a transaction account with payment capabilities, but it doesn’t have any lending attached to it yet. We will get to lending, and so we will get to small business lending and probably some consumer lending down the track as well. The brand of AMP is a great brand and very well known. As a challenger bank we’re well placed. This is a really underserved and unhappy part of the market” stated AMP Bank CEO Sean O’Malley.
With a reported 92 percent of residential mortgage loans third party derived, the retail arm will continue to rely heavily on the broker channel however business banking will engage a stronger proprietary focus. AMP report that close to 9 in 10, or approximately 2.4 million, of Australian enterprises are either self-employed or employ up to four people while the majority of businesses in Australia have turnover of less than A$200,000 annually. A quarter of all businesses in Australia, almost 640,000, have turnover of less than A$50,000 annually.
“Brokers make up such a huge part of the market. And for AMP, we’re about 90 percent, 92 percent of our flow in home lending is mortgage brokers and so really important partners, really important channel, going to continue to invest in that. We’re doing a lot of work on the digitisation and improvement of that origination journey for brokers, that’s going to continue. We absolutely think that in the smaller business space, for deposits, payments and probably some smaller lending, that’s less broker sweet spot. And so, we anticipate that to be more direct” O’Malley added.
“AMP is bringing true innovation to the Australian market by launching a modern, digital-first banking experience. Their focus on providing a seamless and intuitive solution for small businesses and personal customers is exactly why we built Engine – to empower banks to deliver better experiences at scale” commented Engine by Starling CEO Sam Everington.