Richard McCarthy

Perpetual Corporate Trust, a leading provider of fiduciary and digital solutions, has been granted a Market License in Australia, allowing it to operate a digital marketplace in a range of debt instruments starting with Wholesale term deposits.

The License will enable Perpetual Corporate Trust to work towards streamlining and modernising the execution of these instruments by offering market participants a fully electronic, self-directed execution SaaS platform. The digital platform will initially focus on facilitating Wholesale Term Deposits between Authorised Deposit-Taking Institutions and institutional, middle-market investors and wealth managers in Australia.

Perpetual Corporate Trust Chief Executive Richard McCarthy said: “The banking and financial services market is experiencing strong growth, with increasing demand for direct investment in secure, low-risk, income producing assets such as wholesale term deposits and fixed income.

“With limited digital trading options currently available, our platform brings greater efficiency, competition, and transparency to the market. The license will allow us to enable the wholesale term deposit market to operate more effectively, efficiently and economically, while managing cyber security and maintaining compliance.

“For over 30 years, Perpetual Corporate Trust has played a foundational role in Australia’s debt markets and managed funds industry and has $1.2 trillion of Funds under Administration^[1].

“Through our focus on innovation, we have digitised and streamlined investor reporting, regulatory reporting, structured finance and fixed income markets by eliminating inefficiencies and enhancing accessibility for issuers, investors, and intermediaries.

“Our commitment to innovation is exemplified by our Fixed Income Intelligence product launched in 2024, a unique end-to-end platform that allows wholesale fixed income investors to purchase domestic and global fixed income securities in smaller parcels, opening the $114 trillion global market to a broader range of wholesale investors.”

Fixed Income Intelligence is an end-to-end SaaS solution for over-the-counter (OTC) domestic and global fixed income markets. The digital platform includes all the components needed to invest in OTC fixed income products including research and portfolio construction, trade execution and settlement, as well as middle office functionality and custody.

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Notes:
[1] FUA as at 31 December 2024

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Richard McCarthy

The ability of non-bank lenders to continue access funding, manage relationships, as well as their capacity to provide innovative technology solutions, are the three most crucial factors facing the $100 billion Australian and New Zealand non-bank securitisation sector, a report published yesterday by Perpetual Corporate Trust has found.

‘Agility Agenda: The story of Australia and New Zealand’s non-bank sector; past, present and future’, looks at the evolution of the industry from its beginnings nearly 30 years ago. It highlights four key areas that has allowed the non-bank sector to flourish, while also recognising the threats and concerns industry participants have about its future growth opportunities.

The report includes the views of 31 CEOs, CFOs, Group Treasurers, Portfolio Managers and other executives covering Australian and New Zealand non-bank issuers, warehouse banks, and both local and global investors.

Industry strength built on four key traits

Since the global financial crisis, the growth and success of the non-bank sector has been built on their ability to access funding, identify market niches where traditional banks may not operate, build and maintain excellent funding relationships, and agile, easy and convenient technology solutions to deliver service excellence for their clients and investors.

Perpetual Corporate Trust Chief Executive Richard Mccarthy said: “For close to 30 years the securitisation market has been a trusted and well-utilised form of funding for non-banks to deliver competitive products to consumers in Australia.

“Over that time the industry has evolved to meet the changing needs of institutional investors, and throughout the past decade specifically, non-banks have thrived as a result of their ability to access competitive and reliable funding from both domestic and international investors, through building and fostering strong relationships, writing good credit, while adopting innovative technology solutions to create great customer advocacy to quickly grow their customer base.”

Access to funding remains vital

A significant factor in non-bank growth has been the ability to access securitisation funding at a cost which enables them to be competitive in the market.

While respondents highlighted there was little to suggest the traditional funding path for new issuers was likely to change, there are significant headwinds for new entrants due to the current state of the market, with the expectation that it will be difficult for many to get traction in the short to medium term.

“Non-banks have always been conscious of the needs of funders and have developed strong, long-term relationships that are standing them in good stead right now. With the broader geopolitical and economic landscape changing, non-banks will continue to be agile and navigate the impacts at both a funding and consumer lending perspective.

“Non-banks have been through the dot com, GFC and COVID cycles and have robust business models, with diversified funding from both domestic and international investors with secure long term relationships which I’m sure will enable them to manage this latest cycle of broader market uncertainty” Mr Mccarthy added.

Technology the key for future success

The report also highlighted the important role technology will play for the industry’s future growth. While the focus on customer experience with quick and seamless loan application and approvals has been fundamental to consumer growth, there is a clear need to continue investing in digital solutions that allow non-banks to remain agile and competitive.

Mr McCarthy added: “While consumers are often the beneficiaries of technology developments in the sector, the increased cyber risks, requirements of funders and the need to proactively service borrowers both give rise to the value of having internal processes and systems running as efficiently, effectively and economically as possible.”

Read the report.

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Jon Alder

Perpetual Corporate Trust (PCT) has appointed a new General Manager to Perpetual Digital, PCT’s digital innovation company.

Jon Alder, joins Perpetual Digital, bringing more than 25 years’ expertise and experience in technology, software and operations. He joins from Bravura Solutions where, since 2011, he has held senior leadership roles such as Chief Operating Officer – APAC and Head of Operations – Australia and Asia.

PCT Group Executive, Richard McCarthy said Jon’s appointment would strengthen Perpetual Digital’s position as an innovative and leading digital solutions provider to the banking and financial services industry.

“Perpetual Digital’s suite of products leverages over 25 years of expertise in securitisation, debt markets and managed funds to develop, deliver and support a range of digital solutions to enable our client’s success. Jon’s wealth of technology, software and operations experience, in addition to his deep understanding of the financial services industry will help us continue to innovate and mature our SaaS business,” he said.

Mr Alder said he is extremely excited to join a market-leading business with such a strong brand and great customer advocacy.

“Perpetual Corporate Trust and Perpetual Digital’s reputation as a trusted provider of solutions to the banking and financial services industry is exemplary. Their Perpetual Intelligence, cloud-based SaaS platform, will be a game changer in the industry and I look forward to delivering on the strategy of being the leading digital solutions provider to the banking and financial services industry,” he said.

Perpetual Digital was established in October 2021 following Perpetual’s acquisition of Laminar Capital. The business aims to provide digital solutions that enable businesses to become more effective, efficient and achieve economies of scale, while reducing cyber risk and maintaining compliance through automation, workflow management and reporting.

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Richard McCarthy

Perpetual Corporate Trust (PCT) recently launched two new capabilities under its Perpetual Business Intelligence (Perpetual BI) digital platform – Securitisation Intelligence and Treasury Intelligence. This is in addition to the previously released Market and Credit Intelligence solutions delivered via Software-asa-Service (SaaS).

The new digital solutions are aimed at supporting our clients and industry to automate cumbersome processes and digitise deal execution and trust management, optimise funding and improve the investor experience.

Securitisation is one of the funding options for banks and non-banks, with deal data traditionally managed out of spreadsheets shared via email for all parties to analyse and manipulate, which investors have advised is inefficient and potentially poses security risks for sensitive data.

Moving beyond the spreadsheet

Perpetual BI’s new digital securitisation management and automation capability aims to address the challenges transaction participants currently face and significantly lessen potential cyber security risks for all parties. It offers a central point of reference where data is stored in a secure cloud environment and can be accessed and reviewed by all relevant transaction participants, eliminating the need to rely on email and spreadsheets to communicate sensitive deal information.

Richard McCarthy, Group Executive of Perpetual Corporate Trust said the new addition to the Perpetual BI platform highlights the important role digital platforms will play in overcoming operational inefficiencies, improving risk management and delivering continuous improvement benefits associated with deal and portfolio management.

“There has been continued engagement and demand for digitising components of the securitisation process. Data management, control around key processes and cyber security have been identified as significant risk areas by Australian regulators and are areas that will face growing scrutiny.

“Traditionally, investors have faced a myriad of challenges when it comes to reviewing new transactions coming to market and portfolio management. The process of managing data quality, consistency and manual manipulation of large volumes of data can be complex, especially when issuers bring deals to market and then upsize them, which duplicates the work and effort for investors. It’s time to move beyond the spreadsheet.

“Digitising components of the securitisation issuance, process and management of deals pre and post settlement will improve both the issuer and investor experience by leveraging the very latest secure cloud technology. Perpetual BI provides a solution to standardise, analyse and visualise data, while providing a central repository for the availability and distribution of consistent data to the market. For business and market participants, it will allow for improved operational efficiency, reduce risk and optimise securitisation program costs,” said Mr McCarthy.

Perpetual Business Intelligence Cloud SaaS platform

Perpetual BI is built on Microsoft’s Azure Cloud technology platform and utilises data warehouse, data lake, Cognitive Services, machine learning and visualisation user interface to deliver digital solutions to our clients via SaaS.

Perpetual BI launched Market Intelligence in 2017, built on 20 years of mortgage data, which helps the banking and financial services ecosystem to improve their financial performance and lower risk though data-fueled decision making.

It also allows financial institutions to benchmark their lending book against the Australian market or specific trusts to drive better analysis and decision making. Perpetual BI launched its second digital solution Credit Intelligence in 2018, which leverages cloud technology with standardised actuarial models built in collaboration between Perpetual and Deloitte to support clients’ needs to comply with regulators in the most effective and efficient manner.

Mr McCarthy commented, “In an ever-changing regulatory environment, it can be difficult to balance profit, risk and client needs. Perpetual BI delivers significant efficiencies by automating labour-intensive manual processes including APRA stress testing, APRA responsible lending (ARS/ARF 223) and regulatory capital (ICAAP/APS120) reporting, as well as financial loss provisioning for IFRS 9 reporting.

“In addition, banks and non-banks can use Perpetual BI to optimise their capital and identify new segments and business opportunities.”

Early adopters of the Perpetual Business Intelligence platform

Since launch, Perpetual BI has worked with market participants to ensure its capabilities are always at the appropriate level of usability and adoption.

New direct and digital non-bank lender Athena Home Loans (Athena) is an early adopter of the platform, signing up for the Perpetual Business Intelligence IFRS9 solution. Athena was looking to bring a fully integrated digital and direct proposition to the Australian mortgage market and turned to Perpetual to support its risk management, finance and reporting functions.

Jason Finlay, Treasurer at Athena Home Loans said access to fast, accurate data was essential for growth. “As a new player in the market we needed to make strategic decisions fast and as our loan book is still maturing, we are able to access Perpetual’s public securitisation data set to support in our decision making,” said Mr Finlay.

“We use Perpetual Business Intelligence’s modelling capability to validate our own hypothesis and get a real time understanding on credit losses on an ongoing basis for all our reporting requirements. Quick access to this information is critical to both our decision making and reporting requirements,” he said.

Rob Camilleri, Co-Founder and Investment Manager at Realm Investment House, another early adopter of Perpetual Business Intelligence said, “The Perpetual Business Intelligence platform gives a multiplier effect to our internal resources in analytics and a productivity gain of ongoing deal monitoring. The way we receive, store and analyse data is constantly under review and the Perpetual Business Intelligence platform is the tip of the sword in this area.”

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