The Secrets of Judo Bank’s Success
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Of the four challenger banking licenses granted by Australian regulators in 2019, only one is still standing – and the Financial Times says it’s growing faster than any other financial institution in Asia-Pacific. At nSight 2023, Judo Bank COO, Lisa Frazier, shared what differentiates Judo Bank and how nCino has been a foundational part of its journey.
SME business bank Judo Bank is on a strong growth trajectory reflected in its lending book that jumped nearly 25% to A$7.5 bn in the six months to the end of December 2022. This growth was recognized in April 2023, when the Financial Times identified Judo as the fourth fastest growing company in Asia Pacific out of the top 500 high-growth businesses in the region.
According to Chief Operating Officer, Lisa Frazier, Judo Bank began in 2016 when a deeply experienced group of bankers who were passionate about the SME economy came together to help establish the challenger bank.
“In 2016, we were a PowerPoint standalone idea. It was very hard to raise money,” Lisa Frazier recalls.
Yet two and a half years after getting a banking license in April 2019, Judo listed on the Australian Stock Exchange and continues to grow and scale its business.
How did they do it?
Make Your Bankers Heroes
Rather than basing a lending decision solely on a narrow view of creditworthiness, Judo relationship bankers – whose customers have their mobile number on speed-dial – understand a person’s character, their strategic plans and financial needs. If the commercial proposition makes sense, Judo moves rapidly to organize finance solutions to help that business grow.
Speed to decision is important for SME business customers and critical to Judo’s success. And that speed requires a blend of human business acumen and smart technology.
“We believe people drive banking decisions, but technology enables them,” says Lisa Frazier. “Our bankers are empowered with data to make in-market credit decisions, overlaying the bank’s approach to credit decisioning with their knowledge of the local market and the business in question. That gives us a powerful combination of individual understanding plus the lending speed that SMEs need. They can't wait months, which is often the case with the big banks.”
Focus on Profitability
Unlike some of the Silicon Valley startups Lisa was previously part of, where revenue growth was the golden child, Judo leaned into profitability from day one.
“We have a highly experienced leadership team that understands the banking environment. We pushed to break even in 2021 before we IPO’d. In our first year as a public company, we announced a A$15 million profit before tax. Our third quarter for our second year was A$87 million profit before tax.”
Make Your Tech Dollars Count
At Judo, digital is key to its business model. But its fast path to profitability depended on deploying its tech investment wisely.
“We try to spend as little as possible on technology,” Lisa says candidly. “We have a flexible tech stack that enables us to build cost effectively. We only build what differentiates us – what’s material to our customer value proposition. We buy and adopt everything else.”
She strongly advises avoiding customization where possible. “Customization starts overtaking the code maintenance and the code upgrades – and then you’re in trouble as total cost of ownership grows. If we do need to customize, then we're very clear about why we need it.”
Pick the best solutions from the world’s best providers
“If there's a better mouse trap out there, we'll find it and we'll use it," says Lisa Frazier. "That’s why nCino is now our loan platform. The lending products driving our current growth all started out on nCino.”
Since Judo went live with nCino commercial lending software, the bank has added nCino Automated Spreading, customer portal and deposit account opening solutions.
“We weren't expecting to fast follow with deposits, but we saw the benefits of the lending platform. So, we decided to put our deposit business – the whole book – onto nCino too. We launched in November 2022. In the first six months, we originated a billion dollars.”
Lisa says the results speak for themselves.
“We’ve seen nine a points improvement in NPS, putting us in the sixties, a 5% better complete rate and 80% fewer calls related to the application.”
Free Up Bankers to Do What They Do Best
Over time, Judo has integrated more and more functionality with the nCino platform so, for its relationship bankers, everything is on one platform with one login.
Lisa says it's given Judo more capacity in its banking team. “Everything from KYC, open data accounting packages, bank statement expense categorization, Equifax Business Registry look up is now on the platform.”
Judo recently built an API to the law firm where it outsources loan documents.
“Now, all the loan data is pushed from nCino straight over to the legal providers. It’s given an enormous amount of time back and reduced errors as well,” reports Lisa.
With great enabling technology, a clear purpose supporting SMEs and a culture of trust, teamwork, accountability and performance, team engagement is high at Judo.
“LinkedIn just rated us as the best place to work in Australia,” she says proudly. “We were very humbled by that.”