From afr 2018...

• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  
• 
  

• 
  
• 
  
• 
  
• 
  

• 
  
• 
  
• 
  
• 
  
• 
  
• 
  

Advertisement

• Companies
• Chanticleer

Chanticleer

PEXA's $1.6b sale raises concerns among bankers

Chanticleer is Australia's pre-eminent business column.

Nov 6, 2018 – 11.00pm

Save

Share

The $1.6 billion sale of electronicproperty settlement company PEXAto a consortium including the Commonwealth Bank of Australia has raised concerns in the banking industry.

The concerns are understandable given that CBA could gain a significant strategic advantage over its competitors from having a $100 million shareholding in PEXA.

Chanticleer wonders what the industry regulator, the Australian Registrars' National Electronic Conveyancing Council (ARNECC), thinks about one of the big four banks owning a 16 per cent stake in what is essentially an e-conveyancing utility.

Alan Cameron, who is chairman of PEXA, says COAG can implement good policy. David Rowe

The CBA shareholding should give it privileged access to all sorts of sensitive information and that raises a number of pertinent questions.

Will CBA make PEXA the default electronic settlement platform for all mortgages written by CBA? Will CBA have access to data on property transactions generated by PEXA? Will CBA's access to information on PEXA's national expansion plans give it an edge over other banks?

Advertisement

These questions have added weight because PEXA iscurrently a monopoly. A competitor is in the wings called Sympli, which is a joint venture between the ASX and the Beck family controlled Australian Technology Innovators.

Sympli has a lot of things going for itincluding access to the ASX's relationship with banks and ASX's settlement technology platform for securities, Austraclear. But Sympli is starting from a long way behind PEXA which has invested about $400 million over the past eight years.

ASX and the Beck family plan on investing a total of $60 million in their electronic settlement platform. One of the strongest competitive advantages for Sympli is that it was created in response to industry frustration at the performance of PEXA.

Solicitors and conveyancing companies around Australia forced to use PEXA because of mandated usage timelines imposed by state governments have been crying out for a competitor offering a simpler solutio "

In my opinion pexa has the first mover advantage in Australia which was helped by the government. State governments would have made many adjustments in their side of paper work to make settlement go through.

it is mandated by law in Australia to use electronic settlements. There is no mandate in any other country for electronic settlement. That means it is not easy to convince people who are used to old ways switch over and learn a new system.

Also Sympli up and running as well now. They have done few settlements now. But we haven't cracked big way any new market yet in 3-4 years.

imo &dyo&glth