AMP is set to launch a new digital bank division focused on serving small businesses and sole traders. This division will be powered by 'Engine by Starling', a software-as-a-service banking platform developed by UK digital bank Starling Bank. Built on Starling Bank's cutting-edge technology, the Engine platform operates in the cloud as a fully managed service. By partnering with Engine, AMP will leverage its expertise to build and develop this new digital bank division, which is expected to be available by early 2025. The company plans to invest approximately $60 million in this initiative, with $40 million allocated for capitalization.
The primary focus of AMP's digital bank division will be on facilitating transactions, payments, and deposits, with lending serving as a secondary priority. AMP aims to mitigate risk through its partnership with Starling Bank, capitalizing on their robust platform and market approach. The division's establishment will take roughly 12 months, operating autonomously from the existing bank in terms of decision-making and operations. Sean O'Malley, from AMP Bank, will lead the division, with the objective of transforming AMP Bank into a comprehensive transactional banking experience tailored for small businesses and everyday consumers.
AMP believes there is an unprecedented opportunity to disrupt the Australian small business market by offering a digital-first banking service specifically designed to meet their unique needs. The digital banking service will encompass a range of everyday banking products, integrations with various services, and a connected digital ecosystem. In order to provide comprehensive support, AMP will also offer human assistance through a 24/7 contact center.
The integration of Starling's Engine platform into the Australian banking ecosystem will encompass linking payment rails, identity providers, and a few shared systems with AMP. This integration will be carried out gradually, following a phased approach similar to the successful launch in the UK market. Notably, the Engine platform's "deep core" nature eliminates the need for extensive connections to peripheral systems such as CRMs and telephony platforms.In a bold move to strengthen its banking services, AMP has announced the launch of a new division that will provide customers with a range of exciting features and products. This development sets AMP apart from its competitors, enabling the company to offer efficient and swift services. Following the initial launch, the company plans to introduce additional offerings such as term deposits, savings accounts, and small overdrafts. Notably, this new division falls under AMP's existing banking license and will utilize shared services to optimize efficiency.
As part of this strategic initiative, AMP will gradually phase out new deposit accounts on its current system and dedicate it solely to cater to lending customers. This includes their offset accounts and payment capabilities. Meanwhile, the new system, Engine by Starling, led by CEO Sam Everington, has been meticulously constructed using pre-integrated modules that communicate through APIs and events. This state-of-the-art platform empowers customers with real-time banking capabilities in a resilient and scalable manner.
To ensure the seamless implementation of this progressive project, the AMP and Starling teams will join forces for system integration and development. The implementation approach prioritizes reducing delivery risks and swiftly bringing new products to market, facilitating AMP's exponential growth. The process commences with a thorough review of existing processes and journeys, followed by configuration and localization adjustments for AMP products tailored specifically to the Australian market.
This new banking venture reflects AMP's steadfast commitment to their banking strategy, which strives to enhance revenue diversification, funding diversification, and ultimately boost profits in the future. In conjunction with this transformative move, the organization is also undergoing a comprehensive rebranding process, solidifying its position as a market-leading financial institution.
AMP's introduction of this innovative division, combined with their vision for impeccable service standards, marks an exciting new chapter in their banking journey. As they continue to redefine the boundaries of consumer banking, AMP is poised to elevate the industry's standards and deliver remarkable customer experiences.
