Analysts say that the Big Four's dominance has harmed the interest of banking customers. With government support for greater market competition, challenger banks like Judo have a legitimate shot at disrupting the Big Four's oligopoly.
Crucially, the license allows Judo to take deposits which can be lent to small businesses. "As an authorized deposit-taking institution, Judo customer’s deposits are subject to the same A$250,000 government guarantee that protects deposits at the larger banks," Judo's co-CEO Joseph Healy told Reuters in April.
Judo, which is led by former National Australia Bank executives David Hornery and Joseph Healing, also has a large warchest thanks to a $140 million fundraising round last August and a US$350 million credit line from Credit Suisse.
86 400 CEO Robert Bell congratulated Judo on winning its banking license. "More banks means better choice and that’s great news for Australians, who have long-deserved better products and services than those offered by the Big Four banks,” he was quoted as saying by Which-50.
Judo expects to focus on meeting the needs of the underserved SME segment, its executives say. “As Australia’s first dedicated business bank, we want to be champions for small and medium-sized businesses – the most dynamic sector of the Australian economy but one that has been often ignored or taken for granted for too long," Judo chairman Peter Hodgson said in a statement.