AMP Bank Launching New Digital SME Business Bank
(17 November 2023 – Australia) AMP is set to launch a new digital bank entity with a focus on small businesses and sole traders.
The newly announced digital bank will specifically target sole traders and small businesses with 1-20 employees, providing a range of transaction and savings accounts. Set to open in Q1 2025 with A$60 million earmarked to develop the group's digital banking service, the division will operate as a separate entity within AMP Bank utilising a distinct technological platform.
The new digital bank is set to use the “software as a service” (SaaS) core platform of British neobank Starling and will compete directly with SME focused Judo Bank who has recently commenced plans to scale up its digital offering. In conjunction with Revolut and Monzo, the neobanks have been successful in expanding the footprint of fintech banks in the United Kingdom. Shares in AMP fell the most in almost four years after the company downgraded margin expectations and announced the digital business bank plans.
The move is designed to capture up to six percent of the A$220 billion in deposits from sole traders and small businesses for AMP Bank and reduce funding risks in the medium term. Lending capability is anticipated to be offered by Q1 2027, AMP Bank Group Executive Sean O’Malley stated.
“This innovative offering builds upon AMP Bank's existing strengths while addressing an underserved yet burgeoning market segment. It will reshape the Bank portfolio in the medium term to better position AMP for the headwinds the industry is facing when it comes to bank funding” stated AMP CEO Alexis George.
“In Engine by Starling, we have chosen a partner with a track record of success and will leverage their innovative technology platform, their highly successful go-to-market expertise and ways of working. By partnering with one of the most innovative and fastest growing digital banks we will be able to better serve Australia’s growing number of small businesses, and individuals, with their banking needs.”