Latest / What the Flux / Biggest banking & fintech stories - 2025 Recap

Transcript

Biggest banking & fintech stories - 2025 Recap · What the Flux

• 0:05
  Speaker 1: This is what the flux. I'm Brett and I'm Justin
• 0:08
  Speaker 1: and it's Monday, the twenty second of December Floxam. Today
• 0:11
  Speaker 1: we are unpacking the biggest banking, financial services and fintech
• 0:15
  Speaker 1: stories of the year. Twenty twenty five was a huge
• 0:18
  Speaker 1: year for finance, not just the markets moving up and
• 0:20
  Speaker 1: down thanks Trump tariffs, but also the way that money
• 0:23
  Speaker 1: actually works, which gow the RBA cut the cash rates
• 0:26
  Speaker 1: three times, major banks make them big cuts, and FinTechs
• 0:29
  Speaker 1: shake up everything from payments to crypto to strap yourselves
• 0:32
  Speaker 1: in For the three biggest stories in the finance face
• 0:35
  Speaker 1: in twenty twenty five.
• 0:36
  Speaker 2: Three lethal stories today. Juzzy boy, Oh, let's do it
• 0:39
  Speaker 2: for our first. A and Z Bank is cutting four thousand,
• 0:43
  Speaker 2: five hundred jobs and scaling back consultants in a five
• 0:46
  Speaker 2: hundred and sixty million dollar restructure under its brand spanking
• 0:50
  Speaker 2: new CEO.
• 0:51
  Speaker 1: Howe up to ten percent of the workforce. That just
• 0:53
  Speaker 1: gone like that? Know me all? Okay?
• 0:55
  Speaker 2: So A and Z is one of Australia's Big four
• 0:57
  Speaker 2: alongside CBA, NAB and Westpac.
• 1:00
  Speaker 1: He's a fun factor, be man. A and Z actually
• 1:01
  Speaker 1: has a larger global workforce than both NAB and Westpack
• 1:05
  Speaker 1: despite being the smallest of the four. Not for long though,
• 1:09
  Speaker 1: ain Z's new CEO, Nunomatos, who started in May, has
• 1:12
  Speaker 1: begun to swing the acts yeap. He's now announced three
• 1:15
  Speaker 1: thy five hundred redundancies of ANZED staff by next September.
• 1:18
  Speaker 1: And on top of this, an Z will also cut
• 1:20
  Speaker 1: ties with a thousand consultants and contractors.
• 1:23
  Speaker 2: And it will affect teams in technology, procurement, risk and retail.
• 1:27
  Speaker 1: The Beeman. Here's the twist. These job cuts are just
• 1:29
  Speaker 1: for now because ANZ promised to maintain its head count
• 1:32
  Speaker 1: by twenty twenty seven.
• 1:33
  Speaker 2: That was a commitment it made as part of its
• 1:35
  Speaker 2: acquisition of Suncourt Bank.
• 1:36
  Speaker 1: So now it effectively allows A and Z to cut
• 1:38
  Speaker 1: jobs in the short term, so long as the number
• 1:40
  Speaker 1: of staff are re hired by twenty twenty seven.
• 1:42
  Speaker 2: And Jazi Boy, this is all part of an Z's
• 1:45
  Speaker 2: plan to improve its cost to income ratio.
• 1:49
  Speaker 1: So what is the key learning here.
• 1:50
  Speaker 2: One of the most closely watched metrics in banking is
• 1:53
  Speaker 2: the cost to income ratio, also known as an efficiency ratio.
• 1:56
  Speaker 1: It measures how much a bank spends to earn a
• 1:58
  Speaker 1: dollar of revenue.
• 1:59
  Speaker 2: The lower the ratio more efficiently the bank is operating.
• 2:02
  Speaker 1: For example, am Z spends roughly fifty two cents in
• 2:05
  Speaker 1: costs to generate one dollar of inca, so its cost
• 2:07
  Speaker 1: to income ratio is fifty two percent.
• 2:09
  Speaker 2: Whereas Combank's cost to income ratio is about forty nine percent.
• 2:12
  Speaker 1: And it's believe that Westpac and nabs cost to income
• 2:14
  Speaker 1: ratio is even lower than combat.
• 2:16
  Speaker 2: So Juzi Boy job cuts and a reduced reliance on
• 2:19
  Speaker 2: consultants will help lower costs and improve this ratio.
• 2:22
  Speaker 1: And the man cutting costs is one of the clearest
• 2:24
  Speaker 1: ways to lift returns as long as it doesn't also
• 2:27
  Speaker 1: hit sales, given up to ten percent of its workforce
• 2:29
  Speaker 1: will be cut now. Interestingly, be Man, Amz's new CEO
• 2:32
  Speaker 1: has been known to enter a new business or business
• 2:34
  Speaker 1: division and cut immediately.
• 2:36
  Speaker 2: Yes, he did this at HSBC in Mexico where he
• 2:39
  Speaker 2: used to work, as well as when he moved to
• 2:41
  Speaker 2: HSBC in Europe.
• 2:42
  Speaker 1: And now he's taking the cost cutting playbook and bringing
• 2:44
  Speaker 1: it to an Z. For our second story, Mcquarie has
• 2:47
  Speaker 1: smashed the big four banks in July this year, snapping
• 2:50
  Speaker 1: up nearly forty percent of all new Australian homeowns red.
• 2:54
  Speaker 2: The big banks must be in even bigger shock here,
• 2:57
  Speaker 2: Jusie boy, what's going on?
• 2:58
  Speaker 1: Hey? Sir. Mcquoe was originally found in nineteen sixty nine
• 3:01
  Speaker 1: and it's best known for being one of Australia's leading
• 3:03
  Speaker 1: investment banks.
• 3:04
  Speaker 2: But that ain't everything it does because it also has
• 3:06
  Speaker 2: other arms like its asset management arm and its wealth
• 3:09
  Speaker 2: management arm.
• 3:10
  Speaker 1: And of course it's retail banking arm, which has personal
• 3:12
  Speaker 1: banking and mortgages the Juza boy.
• 3:14
  Speaker 2: Over the last few years, McQuary's retail bank has gone
• 3:17
  Speaker 2: hard in the mortgage space.
• 3:18
  Speaker 1: And clearly it's paying off. Get this. According to APRA,
• 3:21
  Speaker 1: Mcquarie landed nearly forty percent of all new home loan
• 3:24
  Speaker 1: lending in the month of July.
• 3:25
  Speaker 2: That means their mortgage book grew six point four times
• 3:28
  Speaker 2: faster than the big four banks in July.
• 3:30
  Speaker 1: Interestingly, though, be Man, more than ninety five percent of
• 3:32
  Speaker 1: these loans going to mcquarie were being originated via mortgage brokers.
• 3:36
  Speaker 2: And clearly mcquarie is becoming a very significant threat in mortgage.
• 3:39
  Speaker 1: Land aka the cash cow of banking.
• 3:42
  Speaker 2: So what is the key learning here?
• 3:43
  Speaker 1: Mortgages may seem boring compared to flashy investment banking, but
• 3:47
  Speaker 1: they're one of the most lucrative parts of the financial system.
• 3:49
  Speaker 2: Yeah, banks love offering home loans because they're sticky, they're
• 3:52
  Speaker 2: long term products and they give banks reliable income for decades.
• 3:56
  Speaker 1: In Australia, mortgage accounts are worth over two point two
• 3:59
  Speaker 1: trillion dollars, which is more than sixty percent of all
• 4:01
  Speaker 1: bank lending.
• 4:02
  Speaker 2: And right now the big four control around seventy percent
• 4:05
  Speaker 2: of this market and it's their single biggest profit engine.
• 4:07
  Speaker 1: Think about it this way, by man, if the bank
• 4:09
  Speaker 1: makes just one percent margin on one hundred billion dollars
• 4:12
  Speaker 1: of mortgages, that is a billion dollars in annual revenue.
• 4:14
  Speaker 1: For Combank, which has a homeland book of around six
• 4:17
  Speaker 1: hundred billion dollars, mortgages are the core driver of its
• 4:20
  Speaker 1: over ten billion dollar and your pro profit and that
• 4:23
  Speaker 1: is why competition in this space is.
• 4:25
  Speaker 2: Fierce, and that's why mcquarie is leveraging an army of
• 4:28
  Speaker 2: mortgage brokers to funnel all leads through its front door.
• 4:31
  Speaker 2: For our third and final story, air Wallex has pulled
• 4:34
  Speaker 2: off Australia's second biggest VC raise ever with a three
• 4:37
  Speaker 2: hundred and thirty million dollar raise. But it's not without
• 4:40
  Speaker 2: some controversy.
• 4:40
  Speaker 1: Juzzy boy, always a little bit of controversy around airwollxb man,
• 4:43
  Speaker 1: So tell me what's going on here.
• 4:45
  Speaker 2: So air Wallx is a payments giant founded in Melbourne
• 4:47
  Speaker 2: in twenty fifteen. It started out facilitating cross border business payments.
• 4:51
  Speaker 1: Since then it's expanded into cards and spend management and
• 4:54
  Speaker 1: other financial services too.
• 4:55
  Speaker 2: Get this one. It took air Wallex nine years to
• 4:57
  Speaker 2: hit five hundred million dollars in annual occurring revue, but
• 5:00
  Speaker 2: then it only took them one more year to double
• 5:02
  Speaker 2: that to a billion dollars in annual revenue. And now
• 5:05
  Speaker 2: air Wallex is writing that momentum to raise three hundred
• 5:07
  Speaker 2: and thirty million US dollars in a series G round
• 5:11
  Speaker 2: series G yep exactly. And this raise values airlex had
• 5:14
  Speaker 2: eight billion US dollars, which is up about a third
• 5:17
  Speaker 2: from only six months ago. But duzzy boy, Airwallex has
• 5:20
  Speaker 2: its chest out right now. It claims it didn't even
• 5:22
  Speaker 2: need this money from the capital raise.
• 5:24
  Speaker 1: Now, No, no, no, it was just about the momentum
• 5:26
  Speaker 1: and taking advantage of the moment So what is the
• 5:29
  Speaker 1: key learning here? Raising capital isn't always about necessity. It's
• 5:32
  Speaker 1: also about buying optionality.
• 5:33
  Speaker 2: You see, when a company is performing well, like doubling
• 5:36
  Speaker 2: its revenue in twelve months, investors are very eager to
• 5:38
  Speaker 2: jump on board. And when investors are eager to jump
• 5:40
  Speaker 2: on board, it allows the company to raise money on
• 5:43
  Speaker 2: highly favorable terms and jazy boy. Many strategically thinking startups
• 5:47
  Speaker 2: go down the path of raising when they have the
• 5:48
  Speaker 2: momentum rather than when they actually need the money.
• 5:51
  Speaker 1: So for Airlex, being fully funded means they can control
• 5:53
  Speaker 1: the timing of their eventual initial public offering.
• 5:56
  Speaker 2: And they don't have to rush to list if the
• 5:58
  Speaker 2: market is weak.
• 5:59
  Speaker 1: Because stuff flox sham, they were the three biggest banking,
• 6:03
  Speaker 1: financial services and inintech stories of twenty twenty five. Join
• 6:06
  Speaker 1: us on Wednesday for a deep dive and recap into
• 6:09
  Speaker 1: one of the hottest topics of twenty twenty five, artificial intelligence.
• 6:13
  Speaker 2: Thanks for listening and we'll see you on Wednesday.