Listed Australian deposit taking institution Goldfields Money (ASX:GMY) looks to be making good on its intention to become a leading player in the digital banking product distribution and BaaS market in Australia, announcing last week that it had signed an MoU with Singapore headquartered remittance fintech Instarem.
Goldfields will be using a Temenos off the shelf core banking system as part of its refreshed BaaS offering.
What is interesting about the MoU is the intent to move beyond remittance towards a broader banking play for cross-border SMEs and products orientated towards visa holders visiting or living in Australia.
Given Instarem’s origin, there is no doubt the company is looking to capitalise on the ever-increasing influx of high net-worth immigrants from the Asia-Pacific region into Australia, many of whom may not be getting the best deal or banking experience from a local Australian provider. If you happen to be a migrant yourself, you’ll probably empathise with just how cumbersome and difficult it is to manage multiple banking and financial arrangements between two jurisdictions.
The two companies should have a healthy market ready to capitalise on. According to the Australian Bureau of Statistics, over the last 10 years the proportion of the Australian population born in China alone has increased from 1.2% to 2.2%, coming in just behind New Zealanders and British immigrants. Those born in India currently make up 1.9% of the population, while citizens from the Philippines, Vietnam and Malaysia collectively add up to further 2.7%.
The outflow of wealth from China, a large portion of which is making its way into the local Australian property market in Melbourne and Sydney via these immigrants, is also increasing the demand for financing solutions for those that have a mix of local and foreign income. This demand can only have increased since major retail banks tightened their requirements for offshore buyers, some refusing loan applications based solely on foreign income altogether. Recent reports suggest PE and debt firms may be looking to plug this gap. Instarem and Goldfields may or may not have aspirations here as well.
Migration isn’t going away. And the degree to which an individual’s assets are spread across countries is also on the increase thanks to globalization. Despite the protestations of certain populist politicians, it is hard to see cross-border trade regressing – economies just won’t survive under protectionism. All of which makes partnerships like these, those that remove frictions and enable business, all the more interesting to watch.