1 00:00:03,690 --> 00:00:06,069 Sean Aylmer: Welcome to The Fear and Greed daily interview. I'm Sean 2 00:00:06,080 --> 00:00:09,610 Sean Aylmer: Aylmer. Financial wellness has become a bit of an industry 3 00:00:09,610 --> 00:00:12,730 Sean Aylmer: buzzword in recent years, but one lender has built its 4 00:00:12,730 --> 00:00:17,140 Sean Aylmer: entire business around it. Wisr is an ASX listed neo- 5 00:00:17,180 --> 00:00:19,860 Sean Aylmer: lender that focuses on personal loans with a goal of 6 00:00:19,860 --> 00:00:24,340 Sean Aylmer: improving the financial wellness of customers, and it appears to 7 00:00:24,340 --> 00:00:26,770 Sean Aylmer: be working, with Wisr taking market share from the big 8 00:00:26,770 --> 00:00:30,840 Sean Aylmer: banks. Anthony Nantes is the CEO of Wisr. Anthony, welcome 9 00:00:30,840 --> 00:00:31,730 Sean Aylmer: to Fear and Greed. 10 00:00:32,010 --> 00:00:32,630 Anthony Nantes: Thanks, Sean. Great to be here. 11 00:00:33,670 --> 00:00:36,250 Sean Aylmer: It's an interesting story, the Wisr one. It had a 12 00:00:36,360 --> 00:00:39,159 Sean Aylmer: major shift in focus from peer- to- peer lending to 13 00:00:39,159 --> 00:00:42,909 Sean Aylmer: launching a loan funding facility about five years ago. Give 14 00:00:42,909 --> 00:00:45,350 Sean Aylmer: us the 1- 0- 1 on Wisr, how it came 15 00:00:45,350 --> 00:00:46,870 Sean Aylmer: about, and why that shift occurred? 16 00:00:48,320 --> 00:00:51,979 Anthony Nantes: The starting point's always been about building a purpose- led 17 00:00:51,979 --> 00:00:55,160 Anthony Nantes: company in this space. There's lots of really great reasons 18 00:00:55,160 --> 00:00:59,210 Anthony Nantes: to build purpose- led companies. From a shareholder return perspective, 19 00:00:59,210 --> 00:01:02,210 Anthony Nantes: it's a great business angle because they typically outperform something 20 00:01:02,210 --> 00:01:06,100 Anthony Nantes: two to three times, typically, other companies. From an employee 21 00:01:06,100 --> 00:01:09,100 Anthony Nantes: point of view, it provides a real why, to why 22 00:01:09,100 --> 00:01:12,040 Anthony Nantes: people come to work. Having a purpose around financial wellness 23 00:01:12,220 --> 00:01:15,730 Anthony Nantes: as a core to what we do, defines what we 24 00:01:15,730 --> 00:01:18,440 Anthony Nantes: do inside the company, how we should behave, why it's 25 00:01:18,440 --> 00:01:21,000 Anthony Nantes: important to put the customers first, and what we stand 26 00:01:21,000 --> 00:01:24,060 Anthony Nantes: for. It's great from a customer point of view because 27 00:01:24,060 --> 00:01:26,570 Anthony Nantes: they know what we stand for. There's a level of 28 00:01:26,950 --> 00:01:29,459 Anthony Nantes: conversation we can have with them around what our purpose 29 00:01:29,459 --> 00:01:32,810 Anthony Nantes: is and, when we're extending credit, what our reasons for 30 00:01:32,810 --> 00:01:34,059 Anthony Nantes: doing it would be and what we want them to 31 00:01:34,060 --> 00:01:37,890 Anthony Nantes: achieve with it. That was really the starting point of 32 00:01:38,170 --> 00:01:41,900 Anthony Nantes: the essence of the idea. Peer- to- peer lending at 33 00:01:41,900 --> 00:01:45,620 Anthony Nantes: the beginning conceptually seemed like a really good idea. You 34 00:01:45,840 --> 00:01:47,970 Anthony Nantes: cut out the middleman. You've got some investors on one 35 00:01:47,970 --> 00:01:49,380 Anthony Nantes: side and borrowers on the other side and you can 36 00:01:49,390 --> 00:01:53,309 Anthony Nantes: make it really efficient for both sides. Fundamentally, there's some 37 00:01:53,310 --> 00:01:56,550 Anthony Nantes: real challenges with double- sided marketplaces in terms of matching 38 00:01:56,770 --> 00:01:57,850 Anthony Nantes: supply and demand. 39 00:01:58,020 --> 00:01:58,090 Sean Aylmer: Yeah. 40 00:01:58,800 --> 00:02:02,420 Anthony Nantes: Particularly when it comes to the nuances of finance and 41 00:02:02,420 --> 00:02:06,340 Anthony Nantes: credit and extending credit. I think very early on we 42 00:02:06,340 --> 00:02:09,020 Anthony Nantes: took a view that it wasn't really a scalable model 43 00:02:09,020 --> 00:02:11,239 Anthony Nantes: and I think we probably did it earlier than a 44 00:02:11,240 --> 00:02:13,690 Anthony Nantes: lot of others, and that's probably come to fruition. You 45 00:02:14,130 --> 00:02:17,139 Anthony Nantes: see most of those models globally haven't really played out. 46 00:02:18,040 --> 00:02:19,940 Anthony Nantes: It was probably in line with what we were trying 47 00:02:19,940 --> 00:02:23,010 Anthony Nantes: to achieve, and a good lesson for us in terms 48 00:02:23,010 --> 00:02:25,580 Anthony Nantes: of, being purpose-led is one thing but you've really got to build 49 00:02:26,220 --> 00:02:29,910 Anthony Nantes: a business model that can deliver that purpose that's going to be sustainable. 50 00:02:31,030 --> 00:02:34,810 Sean Aylmer: It's not peer- to- peer lending, it's accessing financial markets. 51 00:02:35,000 --> 00:02:36,899 Sean Aylmer: In terms of the funds that you're lending, where's that 52 00:02:36,900 --> 00:02:37,360 Sean Aylmer: come from? 53 00:02:38,430 --> 00:02:42,290 Anthony Nantes: A combination of capital raise. We have debt wholesale warehouse 54 00:02:42,290 --> 00:02:47,230 Anthony Nantes: facilities with major banks, and things like superannuation funds who 55 00:02:47,230 --> 00:02:49,889 Anthony Nantes: invest into our loans, as well as the overall credit 56 00:02:49,889 --> 00:02:54,489 Anthony Nantes: market. We tap into the bond issuance market through securitization 57 00:02:54,490 --> 00:02:58,070 Anthony Nantes: deals so that we can utilize the entire credit system 58 00:02:58,139 --> 00:03:01,560 Anthony Nantes: at the back end. Rather than, being a P2P platform 59 00:03:01,560 --> 00:03:03,680 Anthony Nantes: with a human being on one side, another human being 60 00:03:03,680 --> 00:03:04,260 Anthony Nantes: on the other side. 61 00:03:04,260 --> 00:03:04,500 Sean Aylmer: Yeah. 62 00:03:04,690 --> 00:03:06,750 Anthony Nantes: We do it in bulk. We go out to the 63 00:03:06,750 --> 00:03:10,580 Anthony Nantes: entire credit market. We take really large quantities of loans 64 00:03:10,580 --> 00:03:13,169 Anthony Nantes: so we can get the best prices possible from the 65 00:03:13,169 --> 00:03:15,260 Anthony Nantes: whole credit market. And then we can take those to consumers. 66 00:03:16,040 --> 00:03:18,220 Sean Aylmer: What are most of your customers using personal loans for? 67 00:03:18,880 --> 00:03:20,820 Anthony Nantes: A range of things. We're probably spent a few different 68 00:03:20,820 --> 00:03:24,669 Anthony Nantes: buckets. The first bucket is asset finance, secure vehicle finance. 69 00:03:25,330 --> 00:03:28,889 Anthony Nantes: Buying a car, second car, caravan, boat, a motorbike, those 70 00:03:28,889 --> 00:03:31,430 Anthony Nantes: types of things. The second big bucket for us is 71 00:03:31,430 --> 00:03:35,440 Anthony Nantes: actually debt consolidation. By debt consolidation, what we're seeing is, 72 00:03:35,440 --> 00:03:39,620 Anthony Nantes: and the vast majority of this is customers who've previously 73 00:03:39,620 --> 00:03:42,840 Anthony Nantes: accessed credit from the big four banks. They might have 74 00:03:42,840 --> 00:03:46,990 Anthony Nantes: taken a loan out from Westpac 13, 14, 15%, and maybe a 75 00:03:46,990 --> 00:03:49,300 Anthony Nantes: bit of credit card debt on bank credit card at 76 00:03:49,330 --> 00:03:52,390 Anthony Nantes: 22, 23%. They'll look at those two products and they might 77 00:03:52,390 --> 00:03:56,060 Anthony Nantes: be averaging, 16, 17, 18% on average to be servicing that consumer 78 00:03:56,060 --> 00:03:58,320 Anthony Nantes: debt. They realize if they actually shift that to us, that there's 79 00:03:58,570 --> 00:04:01,290 Anthony Nantes: a pretty significant savings they can have. We see a 80 00:04:01,290 --> 00:04:04,000 Anthony Nantes: lot of direct shift from big four bank customer directly 81 00:04:04,000 --> 00:04:08,070 Anthony Nantes: to us. And then the third bucket is other use 82 00:04:08,070 --> 00:04:11,440 Anthony Nantes: cases. We do a lot of home renovations, bathroom renovations, 83 00:04:11,440 --> 00:04:16,620 Anthony Nantes: kitchen renovations, swimming pools, elective medical travel, basically anything that someone wants 84 00:04:16,620 --> 00:04:20,910 Anthony Nantes: to do with 30, 40, $50, 000. We will fund if it's for 85 00:04:20,910 --> 00:04:21,570 Anthony Nantes: a good purpose. 86 00:04:21,930 --> 00:04:25,880 Sean Aylmer: Okay. It's 30, 40, $50,000 a typical loan, is it? 87 00:04:27,070 --> 00:04:30,789 Anthony Nantes: Average loan for us is $30, 000 over around about five 88 00:04:30,790 --> 00:04:34,520 Anthony Nantes: years. This is an interesting point around where does our 89 00:04:34,520 --> 00:04:38,330 Anthony Nantes: business model sit? Historically, if you look at the consumer 90 00:04:38,330 --> 00:04:41,810 Anthony Nantes: finance market in Australia, that the big four banks wrote 91 00:04:41,880 --> 00:04:44,040 Anthony Nantes: all prime consumer credit. 92 00:04:44,520 --> 00:04:44,520 Sean Aylmer: Yeah. 93 00:04:44,520 --> 00:04:46,710 Anthony Nantes: And if you're a good customer and you had good 94 00:04:46,710 --> 00:04:48,560 Anthony Nantes: credit, you would go to one of the big four banks 95 00:04:48,560 --> 00:04:50,969 Anthony Nantes: and that they wrote 80% of all consumer credit in 96 00:04:50,970 --> 00:04:54,360 Anthony Nantes: Australia. And then if the bank said, no, you would 97 00:04:54,360 --> 00:04:55,330 Anthony Nantes: go to a non- bank lender. 98 00:04:55,720 --> 00:04:55,900 Sean Aylmer: Yeah. 99 00:04:56,370 --> 00:04:58,930 Anthony Nantes: Non- bank lenders would charge more than banks and they 100 00:04:58,930 --> 00:05:01,609 Anthony Nantes: would do low docs or self- employed, or if you 101 00:05:01,610 --> 00:05:04,080 Anthony Nantes: had other issues in your past or made a couple 102 00:05:04,080 --> 00:05:06,710 Anthony Nantes: mistakes and a bank thought you were a bit risky, 103 00:05:06,720 --> 00:05:10,760 Anthony Nantes: then you'd go a non- bank lender. Traditionally, that's where non- 104 00:05:10,760 --> 00:05:14,210 Anthony Nantes: bank lenders have existed. They'll be the yes when a 105 00:05:14,210 --> 00:05:17,539 Anthony Nantes: bank says no. Whilst we are non- bank lender, our 106 00:05:17,540 --> 00:05:19,490 Anthony Nantes: business model is very different. We want to be the 107 00:05:19,490 --> 00:05:24,120 Anthony Nantes: first yes. We write bank level credit. We are trying 108 00:05:24,120 --> 00:05:26,690 Anthony Nantes: to get the very best customers in Australia, most credit 109 00:05:26,690 --> 00:05:28,909 Anthony Nantes: worthy customers in Australia, and we want to give them a 110 00:05:28,910 --> 00:05:34,520 Anthony Nantes: significantly better deal, experience, an overall end to end relationship 111 00:05:34,520 --> 00:05:35,940 Anthony Nantes: with us than what they would get from going to 112 00:05:35,940 --> 00:05:39,510 Anthony Nantes: the big four banks. We're really going after that 80% 113 00:05:39,950 --> 00:05:42,960 Anthony Nantes: market that the banks have been playing in, of prime, 114 00:05:43,010 --> 00:05:46,100 Anthony Nantes: really good quality customers. Like I said, we want to 115 00:05:46,100 --> 00:05:49,599 Anthony Nantes: be the first option, not the option when the banks 116 00:05:49,600 --> 00:05:51,390 Anthony Nantes: say no, and coming to us. We're not an option for that. If the 117 00:05:52,050 --> 00:05:53,890 Anthony Nantes: bank says, no, we're likely to say no as well. 118 00:05:54,320 --> 00:06:03,080 Sean Aylmer: Stay with me, Anthony. We'll be back in a minute. 119 00:06:03,080 --> 00:06:06,380 Sean Aylmer: My guest this morning is Anthony Nantes, CEO of Wisr. 120 00:06:07,200 --> 00:06:09,789 Sean Aylmer: As you're talking there, Anthony, it took me back to 121 00:06:10,070 --> 00:06:13,360 Sean Aylmer: the Aussie home loan early days in Wizard, where they 122 00:06:13,360 --> 00:06:16,040 Sean Aylmer: took on the banks in their own marketing, in home 123 00:06:16,040 --> 00:06:19,010 Sean Aylmer: lending. In that instance, you are taking on the banks 124 00:06:19,010 --> 00:06:22,420 Sean Aylmer: in consumer lending, in their own markets, as opposed to 125 00:06:22,839 --> 00:06:25,111 Sean Aylmer: necessarily chasing people at the edges that the banks don't want. 126 00:06:25,111 --> 00:06:30,170 Anthony Nantes: I think there's the some interesting similarities. I think one of the things that we do, that's 127 00:06:30,500 --> 00:06:33,570 Anthony Nantes: quite different in this space is, from the very beginning 128 00:06:33,570 --> 00:06:36,720 Anthony Nantes: of launching the business, we've really tried to structure the 129 00:06:36,730 --> 00:06:40,700 Anthony Nantes: product and the offering in the customer's best interests. When 130 00:06:40,700 --> 00:06:44,729 Anthony Nantes: you're lending money, getting $ 20,000 or $30,000 from us or from Westpac or 131 00:06:44,740 --> 00:06:47,070 Anthony Nantes: CBA or whoever it else might be, it's the same 132 00:06:47,430 --> 00:06:50,210 Anthony Nantes: product at the end of the day. 25,000, $3, 000 money in your bank 133 00:06:50,210 --> 00:06:52,589 Anthony Nantes: is the same. It's hard to differentiate at that level 134 00:06:52,700 --> 00:06:53,670 Anthony Nantes: on a product when you're lending. 135 00:06:54,440 --> 00:06:54,460 Sean Aylmer: Yeah. 136 00:06:54,460 --> 00:06:57,500 Anthony Nantes: We've looked at the other things around the product as 137 00:06:57,500 --> 00:07:00,469 Anthony Nantes: ways we can differentiate. From the very beginning offering a 138 00:07:00,470 --> 00:07:03,710 Anthony Nantes: product that had no monthly fees and no early repayment 139 00:07:03,710 --> 00:07:07,089 Anthony Nantes: fee, which was a strange concept. Banks would usually charge early 140 00:07:07,089 --> 00:07:09,800 Anthony Nantes: repayment fees. If you borrow money from them you say, " 141 00:07:09,970 --> 00:07:12,160 Anthony Nantes: I don't need. I'm head of the game. I want 142 00:07:12,160 --> 00:07:14,210 Anthony Nantes: to pay this loan off early." The bank would say, " 143 00:07:14,600 --> 00:07:16,760 Anthony Nantes: We assumed we're going to make a certain amount of 144 00:07:16,760 --> 00:07:18,850 Anthony Nantes: money from you. You're paying off early, we're not going 145 00:07:18,850 --> 00:07:20,290 Anthony Nantes: to make it. You got to pay us a fee 146 00:07:20,970 --> 00:07:23,010 Anthony Nantes: because we already assumed to make some money off you." 147 00:07:23,860 --> 00:07:26,300 Anthony Nantes: Which, is a crazy thing. We did away with early 148 00:07:26,300 --> 00:07:29,980 Anthony Nantes: repayment fees and then we also did some extraordinary things. We 149 00:07:30,370 --> 00:07:32,700 Anthony Nantes: created an app and product to actually help our customers 150 00:07:32,700 --> 00:07:33,970 Anthony Nantes: pay these loans off faster. 151 00:07:34,840 --> 00:07:38,050 Sean Aylmer: That financial wellness thing is very important to you guys. 152 00:07:38,420 --> 00:07:41,740 Anthony Nantes: It's the (foreign language) of the company. It's why we 153 00:07:41,740 --> 00:07:44,760 Anthony Nantes: exist as a business and doing that well is good 154 00:07:44,760 --> 00:07:48,740 Anthony Nantes: for everybody. Doing the right things by our customers actually 155 00:07:48,740 --> 00:07:50,700 Anthony Nantes: might mean we might make a bit less margin the 156 00:07:50,700 --> 00:07:50,770 Anthony Nantes: banks do. 157 00:07:51,380 --> 00:07:51,570 Sean Aylmer: Yeah. 158 00:07:52,090 --> 00:07:54,200 Anthony Nantes: If we are helping our customers repay their loans early 159 00:07:54,200 --> 00:07:57,370 Anthony Nantes: and faster, we will make less margin than the banks. Our 160 00:07:57,370 --> 00:07:59,560 Anthony Nantes: fundamental belief is we're going to build a much bigger 161 00:07:59,560 --> 00:08:01,739 Anthony Nantes: company as a result of doing the right things by 162 00:08:01,740 --> 00:08:02,410 Anthony Nantes: our customers. 163 00:08:03,020 --> 00:08:05,900 Sean Aylmer: You do specific loans like electric vehicles as an example. 164 00:08:05,920 --> 00:08:08,740 Sean Aylmer: Why is that all part of that purpose? 165 00:08:09,360 --> 00:08:11,780 Anthony Nantes: Yeah, I think it is. I think it's about being 166 00:08:11,780 --> 00:08:14,910 Anthony Nantes: cognizant of the community in which we live and operate 167 00:08:15,430 --> 00:08:19,780 Anthony Nantes: as a business. Building a business model, which structures ourselves 168 00:08:19,780 --> 00:08:22,620 Anthony Nantes: as a member of the community and the way we'd 169 00:08:22,620 --> 00:08:25,450 Anthony Nantes: want to behave as a member of the community. That means leaning 170 00:08:25,450 --> 00:08:27,840 Anthony Nantes: into things that we think are going to have good, 171 00:08:27,840 --> 00:08:31,610 Anthony Nantes: sustainable long term benefits for everybody. Accessing credit's super important 172 00:08:32,110 --> 00:08:34,179 Anthony Nantes: when someone enters. It's a really important part of the 173 00:08:34,179 --> 00:08:35,219 Anthony Nantes: fabric of our society. 174 00:08:35,630 --> 00:08:35,689 Sean Aylmer: Yeah. 175 00:08:35,880 --> 00:08:39,730 Anthony Nantes: Making that a really good experience and helping people do 176 00:08:39,730 --> 00:08:42,000 Anthony Nantes: things like buy electric cars and other things that they 177 00:08:42,000 --> 00:08:44,790 Anthony Nantes: need to do. Whether we can actually lend the money 178 00:08:44,790 --> 00:08:48,230 Anthony Nantes: or not, really being cognizant that even if we have 179 00:08:48,230 --> 00:08:51,550 Anthony Nantes: to decline someone and say, " Sorry, you can't actually afford 180 00:08:51,550 --> 00:08:53,010 Anthony Nantes: this loan," which is something we have to do a lot. 181 00:08:53,420 --> 00:08:53,500 Sean Aylmer: Yeah. 182 00:08:53,580 --> 00:08:57,020 Anthony Nantes: Making sure that's also a really good experience because when 183 00:08:57,020 --> 00:09:00,280 Anthony Nantes: someone needs access to credit, it's usually because they have 184 00:09:00,280 --> 00:09:02,310 Anthony Nantes: something really important in their life that they want to do. 185 00:09:03,530 --> 00:09:07,280 Sean Aylmer: Why has this had 23 consecutive quarters of loan growth? 186 00:09:07,610 --> 00:09:10,160 Sean Aylmer: You've been running big marketing campaigns, including one during the 187 00:09:10,160 --> 00:09:14,559 Sean Aylmer: Olympics last year. What's next? It's consumer lending and keep 188 00:09:14,630 --> 00:09:16,809 Sean Aylmer: growing that. Do you think you'll ever go into business 189 00:09:16,809 --> 00:09:18,670 Sean Aylmer: lending? Do you think you'll ever go into home lending? 190 00:09:18,830 --> 00:09:20,010 Sean Aylmer: What is next? 191 00:09:20,360 --> 00:09:23,339 Anthony Nantes: Our longer term vision is to say, we think we 192 00:09:23,340 --> 00:09:25,350 Anthony Nantes: can be the number one alternative to the big four 193 00:09:25,350 --> 00:09:28,809 Anthony Nantes: banks in consumer finance in Australia. We think there's a better 194 00:09:28,809 --> 00:09:33,570 Anthony Nantes: model. We think fundamentally taking care of their customers, structuring products 195 00:09:33,570 --> 00:09:37,579 Anthony Nantes: and the ancillary things around your product so that they're 196 00:09:37,580 --> 00:09:40,729 Anthony Nantes: in the customer's interest is really important and allows us 197 00:09:40,730 --> 00:09:43,809 Anthony Nantes: to grow and scale something pretty unique. The bank still 198 00:09:43,809 --> 00:09:47,140 Anthony Nantes: write the vast majority of all consumer finance Australia. Don't 199 00:09:47,140 --> 00:09:49,370 Anthony Nantes: quote me on this number exactly, they're down to around 200 00:09:49,370 --> 00:09:52,710 Anthony Nantes: about 73, 74% of all consumer finance in the prime sector. 201 00:09:53,610 --> 00:09:53,630 Sean Aylmer: Yeah. 202 00:09:53,630 --> 00:09:57,130 Anthony Nantes: They've lost some market share. We've taken one to 2% market 203 00:09:57,130 --> 00:09:59,550 Anthony Nantes: share in the two products in which we have today, 204 00:10:00,250 --> 00:10:03,620 Anthony Nantes: an unsecured and secure personal loan. Clearly there's huge amount 205 00:10:03,620 --> 00:10:06,780 Anthony Nantes: of upside for us doing what we're doing today, but 206 00:10:06,970 --> 00:10:11,020 Anthony Nantes: between now and the future, we would see ourselves expanding 207 00:10:11,500 --> 00:10:14,250 Anthony Nantes: what we can do for Australians and growing our footprint 208 00:10:14,250 --> 00:10:15,880 Anthony Nantes: across other financial products as well. 209 00:10:16,350 --> 00:10:18,300 Sean Aylmer: Anthony, thank you for talking to Fear and Greed. 210 00:10:18,559 --> 00:10:19,730 Anthony Nantes: Great to be here guys. Thanks for the time. 211 00:10:20,179 --> 00:10:23,559 Sean Aylmer: That was Anthony Nantes, CEO of Wisr. This is The 212 00:10:23,559 --> 00:10:25,750 Sean Aylmer: Fear and Greed daily interview. Join us every morning for 213 00:10:25,750 --> 00:10:28,470 Sean Aylmer: the full episode of Fear and Greed, Australia's most popular 214 00:10:28,700 --> 00:10:31,839 Sean Aylmer: business podcast. I'm Sean Aylmer. Enjoy your day.