Afterpay has been named as Westpac’s first partner on its new digital “bank-as-a-service” platform.
Under the partnership, Afterpay will provide Westpac transaction and saving accounts, and other cashflow management tools to its 3.3 million Australian customers in Q2 2021.
“The platform allows us to combine our banking experience with the innovation of our partners to support new customer experiences. We look forward to working with Afterpay to deliver new products and services,” Westpac CEO Peter King said.
Westpac announced its investment in the digital banking platform during its full-year results last November.
Then-CEO Brian Hartzer touted the new platform would complement Westpac’s existing banking business.
“This will initially operate a ‘bank-as-a-service’ model and we intend to bring new digital products and services to market through fintech and institutional partners,” he said.
“This will allow Westpac to reach a new group of customers as well as create value for our partners by enhancing the service offering to their own customers.”
The announcement was coupled with a minority equity investment in 10x Future Technologies, a UK-based cloud banking tech provider, whose cloud technology now underpins Westpac’s digital banking platform.
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At the time, Hartzer said the bank’s range of fintech partnerships would open up opportunities in an “increasingly digitised world”.
“This initiative builds on the significant investment we have made — and will continue to make — in modernising our platforms, including the Customer Service Hub and Panorama,” the then=CEO continued. “Together this will mean we have the right systems to meet changing customer needs now and in the future.”
Last week, the Australian Transaction Reports and Analysis Centre (Austrac) gave Afterpay the all-clear after concluding its anti-money laundering investigation into the fintech.
Austrac ordered the appointment of an external auditor into Afterpay’s Australian operations in June last year. Specifically, the regulator asked for the examination of Afterpay’s compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).
“In response to the findings and recommendations identified in the external audit report, Afterpay has uplifted its AML/CTF compliance framework and financial crime function, and completed all remediation necessary to ensure compliance,” Austrac wrote.
“After considering the report and the response by Afterpay, Austrac has decided not to undertake further regulatory action.
Westpac, on the other hand, reached an agreement with Austrac to settle the anti-money laundering and counter-terrorism financing allegations that were raised by the watchdog in November 2019.
Should the Federal Court accept the penalty, the bank will pay AU$1.3 billion for breaching the AML/CTF Act over 23 million times. Westpac has admitted to the breaches, which include failing to report international funds transfers of more than AU$11 billion.
