Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a neowealth disruptor in Australia.

It may have been a tough year for Australia’s banks -with cash earnings reportedly tumbling to their lowest level in 20 years – but it was a bumper year for non-bank and fintech commercial lenders. According to new data released by broker group FAST, non-bank lenders doubled their commercial settlements in 2019.

The FAST Business Lending Index Report also revealed that the major banks had lost significant market share in business lending and equipment finance, dropping 10 percent. Across all business lending, non-bank lenders lifted their slice of the lending pie from 5 to 11 percent.

It’s a result that owes much to the principle of efficiency, which lies at the heart of many non-bank lender business models. The margins are lean, and the business is hard won, so using data from cloud accounting platforms and bank feed aggregators to not only make better but faster decisions is key. From the results now being reported, it’s clear the model is working.

Confusion at the most senior banking and government levels about how to interpret and then apply legislation in a post Royal Commission world, when it comes to business banking, has probably helped the non-bank lenders cause as well. Banks are increasingly wary of putting a foot wrong with borrowers of any description – especially those whose personal finances are tied up with their business, so many SME borrowers are finding doors closed to them at the big institutions.

Even though responsible lending provisions don’t apply to commercial lending in Australia, after the public fall from grace the major banks suffered in 2018, it’s really no surprise they are hesitant on all fronts.

Prospa is one non-bank business lender that has no doubt benefitted from this swing away from the major banks. Listing on the Australian Stock Exchange back in June of this year, it has since released its FY19 annual results.

Since June 2018 the business has seen 58% growth in number of customers to 20k+ and a 38% uplift in origination volume, to $501.7 million.

With news banks are on the nose with business lending, existing players will be doubling down with investment in acquisition and new players will no doubt have appetite to enter. It’s quite possible this shift from banks to non-banks is the tipping point of the change ahead.