PEXA Group Limited (PXA) Earnings Call Transcript & Summary

Good morning, everybody, and that is in person and that everyone who is virtual. And before I [ follow ], I just want to pay my respects to the elders, past, present and emerging on the lands we speak today. Here is the [indiscernible] nation but obviously, where you are virtually paying my respects to the elders in your lands as well. Everyone here today, we're quite excited to share further the PEXA story. Today, we're going to focus on 2 of our growth businesses, PEXA U.K. and our PEXA Insights. So without further ado, the presentation is going to be made available public. If you already haven't received it, you'll be able to see it on our website, and we've also put it with the ASX as well. Now a couple of things. I'm going to introduce our speakers. We've got Scott Butterworth, who is our Chief Data and Analytics and Insights Officer. Scott is a very experienced executive, working at senior levels, both at financial services and the legal sector as well, amongst others, both domestically and internationally. I'm really pleased that Scott has joined PEXA. He brings a number of things to PEXA from data, M&A, strategy, finance and numerous other aspects. He's already rapidly accelerated our Insights business. So you'll hear from Scott. We've got James Bawa, our U.K. CEO, and I'm really pleased that you'll be able to meet James in person, not on the virtual screen. James has also been with PEXA now for over 12 months and leading our U.K. business. James is also a senior and experienced executive working in the financial services sector in the U.K. in leading financial services organizations, but also been involved with the regulatory area as well, both very important for our start-up in the U.K., and it's great having James here as well as part of the team. And we've got Gary Howard, who is our Chief Transformation Officer, also a senior experienced executive working in financial services, both domestically and internationally. And a very unique skill that Gary brings is not only running the operations in both countries in financial services, but was also involved in the implementation of PEXA in the National Australia Bank group as a customer, and that's very unique and very important for us as we expand into other markets as well. So you're going to hear from Gary and James, who are going to talk about the U.K. business and our expansion there, and you're going to hear from Scott who's going to be talking about our data and insights expansion as well. Now just a couple of things, I won't be talking too long, but I just want to remind people, and I, obviously, have met a lot of you here and people here in the room and those virtually as well. But just to remind you a little bit about the PEXA business. PEXA is very unique and successful platform business. So there's 4 parts of it. We look at the Australian business, which is our exchange business, going exceptionally well. We've grown over the past couple of years. We now operate in all jurisdictions, Tasmania and Northern Territory, and we expect to go there over the next couple of years. We've got over 85% market share of property transactions now going through our platform and doing about 300,000 transactions approximately a month. We're central to the property sector within Australia. Every metric we look at is a good strong metric. It's a very strong business. In saying that, strong platform business gives us the opportunity to actually start to look at other areas for us to grow. And the first area, in particular, is expansion into other like markets. Given we're unique, we're a world leader in terms of what we do, what other markets can we expand to? And as I've mentioned in some of the other sessions previously, there's some consistent light markets to Australia, they are natural extensions for us. And we've started off with the U.K. in particular around England and Wales. You'll hear from James and Gary in terms of the good solid progress we've made in that market. The other area is our platform business, is extending into new areas, natural areas around the platform tech business. And those areas for us, as an example, is really trying to extend into data insights. Now we see that as a natural growth area. We've been working on this for 12 months or so, and again, making good, strong progress in the data insights business. That's a natural extension in terms of what we do, and we can see a unique proposition that we can bring to the market, and Scott will explain that further. The fourth area is a business called PX Ventures, which we won't talk about today, but in an upcoming session we'll deep dive into the PX Ventures and why we see that is important to our platform business and the property ecosystem, just generally, and why it's going to be an important point of differentiation for our group. Now there's going to be the opportunity to ask Q&As of Scott, James and Gary. That will be at the end of each session. So without further ado, I'm going to hand over now to Scott Butterworth, our Head of Data and Insights business. Over to you, Scott.

Well, thank you, everyone, for attending both in person and via the webinar. I'm going to talk about a few things today. One, why PEXA are in property; two, what we see about the growth in the market; and then thirdly, how we are competing in that developing market. One of the questions I often get asked is why is PEXA moving into the property business. And it's a good question, but I think there are 2 answers to it. The first is we bring a wealth of transactional data and depth of transactional data that is unparalleled by any other provider in Australia. Last year, the PEXA's settled properties which were equivalent in value to 1/3 of Australia's GDP. What that means is we see around about 85% of all the property transactions in Australia. We also see 90% of all the mortgage refinancings in Australia. And on top of that, those transactional flows give us deep insights into things such as geographic mobility. I can tell you every day of the week, where people are going to and where people are coming from at the street level across Australia and no other data provider can provide that information at that level of granularity and at that level of timeliness. The other thing which PEXA brings is distribution. The successful exchange business that we have built has enabled us to build very, very strong relationships with all the important stakeholder in the property market in Australia. FIIs, practitioners, government, developers, all of whom have a very important part to play. And through our PEXA key product, we're also building reach into the consumer segment. So I think PEXA brings unique data and distribution capability to the property information market. And what that means is we can provide comprehensive property content, which is not available elsewhere. Just as an example, we produce quarterly and monthly information on the level of refinancing in Australia, where shares are being won, where shares are being lost across majors, minors and at the institution level. As you know, for those of you who also [ care about ] the banking stocks, trying to get a good line of sight into that activity is very, very difficult. In addition to that, we obviously have our settlement information, which arrives in a more timely fashion than some of the other data sets because we see the settlements as they occur. We don't have to wait for 90 days before the information is published by the [ value in generals ] in each state. And that content, I think, puts us in a very fortunate position because what we see in the next decade or so is a very significant set of discontinuities passing through both the supply side and the demand side of the Australian property market. On the supplier side, those discontinuities range from climate change at one extent through to the pressures we're seeing in the supply chain at the moment, which is putting pressure on the cost of building materials and building labor. And also importantly, continuing constraints on the supply of land associated with zoning and permissioning constraints. And on the demand side, we see, obviously, the sequela of the various macroeconomic settings that are flowing through the economy. But there's important demographic issues also playing through, not the least of which is the post COVID changes to the pattern of settlement in Australia. As an [ aside ], what our geographic mobility data is showing is that the 2 fastest-growing municipalities in Australia are the Sunshine Coast and the Gold Coast, a lot of which is actually people leaving Melbourne to go to there. Where there's discontinuity, there's uncertainty and where there's uncertainty, there's risk. And where there's risk, you need information to navigate. So what we see is that these discontinuities in the property market will actually drive a significant increase in demand for land information to help people navigate those uncertainties. In fact, we see that the market will grow from around about $400 million, $500 million today to circa $1.1 billion in the next 5 years. And there are 2 important segments in that market. The first is what we call traditional land information. So this is where you have a piece of data and I sell it to you in a largely untransformed form. A good example of that is title search. That market is very mature. It's got mature players and mature products. And by and large, we expect it to grow more or less in line with the economy. There is a second segment which is much small today but where we see the bulk of the growth occurring. And that's what we call augmented services. This is where you take a piece of data, transform it into something which prompts value-creating action and you provide that solution to a customer. The impact -- and those products often have characteristics of what we call [ D2P ]. That is to say, they're descriptive and tell you what's happening now, they're predictive about what's going to happen in the future and prescriptive about what to do about that future if it comes to pass. Given the uncertainties we see in the property market, we see quite substantial growth in that augmented solutions component of the market. And interestingly, if I look at the rate of activity across the property sector and in general, and across PropTechs in particular, the weight of their activity is in that augmented services market and that's where the innovation and development is occurring. Where PEXA will be playing is in that augmented services market because we believe that, that land is still there to be claimed and that there's very little point in competing in a mature market with mature players with mature products. We would rather build a business focused on those augmented solutions because we think that creates the best use of our data together with the other attributes that we're acquiring in over time. And to further focus our efforts, there are 4 key use segments where we wish to focus our efforts. The first of that is on what we call the demand for land. So where is the demand for land growing and falling? And what that leverages is our geographic mobility data. The second is what we call the use of land, which is how do you optimize the use of a property or the use of land, either given its existing planning constraints or permissioning constraints or alternatively, how you lobby and change those permissioning constraints to allow for a higher value use for the community or for the private individual. We think that's actually the most significant of these 4 segments, both in terms of size and the degree of influence that it creates for PEXA. And what we bring to that market is our distribution into key components of that use category. The third area where we are focused is on system efficiency. As you all know, there's a very substantial amount of transaction cost in the property system today. In fact, it's around about $20 billion of cost is in the transaction side of the property space. A lot of that cost is driven by handoffs between different actors in the system and by activity which occurs between players in the system rather than necessarily within their own organization. Now the problem of managing that cost is it's difficult to do so because you only see to the end of your organization. But what we're seeing is pressure on all players in the property space to reduce transaction costs, in part because of the pressure on affordability. So politicians are trying to pressure players in the system to reduce the cost of transactions as a partial mitigant to affordability issues. What PEXA brings to that is our transaction -- system-wide transaction data because we can provide people with insight and rather what to do about the transaction costs arising from the interaction between different players in the system. The last area of focus for us is affordability. And this is not so much a commercial proposition, although there's a little bit of money in the business, but we're really interested in here is building PEXA's reputation and attracting and retaining talent in a tight labor market. And what we aim to do here is to work with like-minded organizations to build a national debate on the issue of affordability and what are the appropriate responses to that issue. And we think that will have an outsized benefit for PEXA. Alongside these activities, we're very selectively entering into commercial partnerships and equity arrangements to acquire data and acquire capability. A good example of a contractual partnership that we've entered into is with Melbourne Business School. They have one of the Asia Pacific's leading business analytics programs at the masters level. And our arrangements with Melbourne Business School not only give us privileged access to interns from that program, which, as you can imagine, is very useful for a data science based business like ours, it also gives us access to leading researchers in operations, research, the economy, macroeconomics and econometrics to work on deep problem associated with the property market. We have 2 projects underway now with Melbourne Business School. To dive a little bit on the nature of these partnerships. I just want to talk for a few moments about Landchecker, which is a business we bought earlier this year alongside our good friends at the RACV. And we have 38% share and RACV has 50%. Now what Landchecker brings to us is both a distribution channel for our own product, but it also brings a product that we will put through our own distribution channels. For example, here in Victoria and other states, practitioners are required to produce a vendor statement, which we call in Victoria a Section 32 statement, that often requires information about the nature of the property, the permissioning constraints associated with the property and the like. It can be quite difficult to obtain this information in a fashion that is actually usable and consumable. Landchecker provides that information to practitioners. Over the year, as Glenn described, we've been focused on laying the foundations for this business. We've built a team consisting data scientists, data engineers, technologists, product people. We've built -- used that team to build 2 products and launch them into market. Early days of these products, but they're out there and people are using them. And we've built some important partnerships. And I think that's laid some good foundations to build the business over the next 18 months. First thing we're doing along with this is building out the leadership team to enable scale up, and we've just made some changes to help us do that. There's a range of products that we will launch and new research that we will launch over the next 18 months in those domains that I was describing before. And then we'll continue to prosecute the build-out of a strong pipeline of opportunities, be they commercial arrangements, equity-based arrangements or outright acquisitions. And the purpose of those arrangements, as I said, to give us access to either data capability or distribution that we do not have ourselves. Where that would put us to is towards our goal of building a scale of land information business. In scale in this market is something of circa $50 million of revenue, which is where we would like to get the business to around the end of -- certainly, by the end of FY '25, if not a little before. I think that would give you a good overview of what we're trying to do in Insights and why we're trying to do it and why PEXA is a natural participant in this market, but I'm very happy to take any questions that you might have.

[indiscernible] A lot of what you've talked about today is the end customers, the government. While they want the products, are they willing to pay for a lot of these? What discussions have you had in regards to that, is the first one?

Firstly, we've had direct conversations with each of the state -- or each of the East Coast state governments who have indicated willingness to buy and purchase product from us. And separately, as we go around the marketplace looking at different opportunities, many of those opportunities have actually well-entrenched government businesses who buy, both at local and state government level who buy data and information from them. So government is certainly willing to pay because the value that's traded is very significant for them. If you are, for example, a state government and you're trying to make an infrastructure decision, you don't want to do it on the basis of, for example, the mobility data that you buy associated with mail redirections because in a world with e-mail, the mail redirection doesn't tell you very much. What you actually need is real-time accurate information so you can actually better predict where the demand is going to be so you can make a $1 billion infrastructure decision. In that context, the land information is pretty cheap.

Yes. I guess following on from that is there's a big ramp-up in your augmented potential revenue for the whole system. Obviously, again, that's largely focused on governments, whether it's local or state.

No. It's across the [ paste ]. So there is, not only government buyers of that information -- there's local government buyers of that this information, FIIs need this information, developers absolutely need this information and as do agents. So it's across the [ paste ] of those segments. We're not so interested at the moment in direct consumer product because the cost of that customer acquisition is still, I think, a little too high for us at the moment.

And maybe, while it might be a little bit early, but if you can give us any insights on -- if you think about the endpoint, is it evenly split between all the different actors, all the different potential consumers or is it more skewed to government or is it more skewed to financial institutions? Who's the end customers, a little bigger ones?

The big segments are government, FIIs and developers. And that's really not surprising because they are the ones who can probably make the most use of the information.

[ And maybe just one more ] for me before I pass it on. Can you just touch on what do you think is the -- does the land the biggest opportunity? And can you give us a little bit more of an insight on when that will be launched? And how you see the ramp-up of the biggest opportunity in front of you at the moment?

So there's 2 -- the 2 biggest opportunities we saw on the [ page ] of that use of land and the growth of land. There's a range of things we're working on at the moment, which we should be able to tell you about in the next quarter or so.

But these will be launched in '22-'23...

The things which we're thinking of will be things which we'll able to take forward during FY '23.

So we have a question online. The question is from [ Hugo De Vries ]. How many salespeople do you have selling data to government business and other sectors?

So we have a small specialist sales force in PEXA Insights. And then we have the generalist sales force in our FII teams. So we have a generalist sales force that looks after our 150, 160 FII clients, and they've been fantastically helpful to us in opening doors and bringing in the specialist capability. The analogy, again, for those who cover financial services is the transaction banking sales force who get brought in by the generalist relationship managers. Those specialist sales force are also covering government as does our Head of Research, who talks a lot with the government and different players in that space. But some of the things we're looking at doing during FY '23 will augment our capability in that respect.

Another question online. This one from [ Tyson Arndt ]. What are the current solutions that address the use of land segment that PEXA is seeking to address?

So the current asset -- the major current asset we have is through Landchecker at the moment. We'll be building out from there. Again, there is a thing which we're working on, which should come to fruition in the next quarter, which we can tell more to you about then. Outside of that, the products we have in market, which have been organically developed, are to do with system efficiency for financial institutions.

Liz Miliatis from Jarden. Just on the $50 million revenue target. In terms of the products you have already in market, how much would be adding into that and perhaps also what's to come? And if you could just give us a bit color in building blocks as to what makes up that $50 million?

So a good set of questions. I think existing products are still early stage. So we'll have to wait and see to see how mature they become in terms of their overall contribution. The mix of products, I think, are relatively proportional to those shares of market that I described on the earlier exhibit.

Brendan Carrig from Macquarie. Just a question around potentially monetizing things like transaction volume data. Have you cast your mind as to how you might be able to do that, given that it would effectively provide some lead indicators into the performance of your business and obviously that could cause some issues with releasing that data for paid clients?

So Richard is -- and I work very closely on exactly that subject. And in fact, some of the stuff we released publicly is deliberately put out in a relative sense rather than absolute sense to address the disclosure issue. I think with our existing clients because they don't always see the whole picture, the disclosure issues become a lot simpler to manage.

And then just maybe on the cost side of those medium-term targets, can you just talk about how the cost base looks across that -- across the business as it starts to scale up in terms of where you are now in terms of headcount, where that might need to trend to and sort of medium- to longer-term margin expectations?

And this is very much -- if we were sort of a startup, this would have this typical start-up economic cycle, more cost at the beginning and build scalability of revenue down the track. As these -- by way of observation rather than by way of prediction, my observation of good land information businesses, they run in steady state at EBITDAs around 30 to 40 -- margins about 30% to 40%. Obviously, given that's a benchmark, we would like to make sure we sort of travel towards it. Now the timing and pace is a bit dependent on how we build out the business.

Getting back to the $50 million target, presumably, that doesn't involve any other acquisitions that'll be incremental to that?

I wouldn't draw that conclusion.

The target probably doesn't really mean that much, does it, because you could just go and buy something?

Well, I'll leave you to make that judgment.

Just on Landchecker, I was just going to ask about the -- a couple of questions about that with the founders, like they've got 11%, how they incentivize? Are they still sort of very excited about the business and running it forward? And also just opportunities for Landchecker globally, are they just operating in Australia at the moment? Is there any opportunities with that business sort of with the analytics to take it even to the U.K.? Is there going to be some opportunities just with the U.K. with the mortgage marketing and providing any data analytics in that market as well?

Another great set of questions. In terms of the Landchecker team, I'm on the Board of Landchecker, as you would expect. And at our last Board meeting, a pretty broad spectrum of the team came to present on where they're at with various things. I was really impressed with the team actually. They're really good people. They're hard at it. And the incentives are very much around continuing to grow that business out. And the Landchecker team in many ways feel they've got the best part of two worlds. On the one hand, they've got the incentive structures which reward continuing scaling of the business; but on the other hand, they got RACV and the PEXA behind them to enable them to do that. In terms of the Landchecker capability internationally, maybe I'll address that in a slightly different way, which is, you'll hear from James very shortly, one of the things we turn our mind to is what's the right timing and pace to build out an analytics business in the U.K.? As you would expect, there's a whole sets of things that sort of come across our desk. We're restraining ourselves at the moment, lot to do -- there's still a lot to do in Australia, but also anything we were to do vis-a-vis land information in the first instance would have to help there build out of James is doing because otherwise, we run the risk of being overly distracted. But if there are things which help there build out of James' business, then we would obviously look at them.

Scott, I have another question about the PX Ventures. So a couple of years ago, you were offering sort of like some co-partnering, where you were sort of co-funding some things through maybe Melbourne Business School and sort of actively sort of looking at those PX Venture opportunities, trying to identify some other start-ups that you could invest in. Is that still...

So I have a few hats at PEXA, one of which is to look after PX Ventures at the moment. There we obviously are [ deeper day later ], as Glenn described, but there's a small down payment on that. What PEXA Ventures is really interested in the rewiring of the property market. So because of digitalization, customer journeys are being rewired across that market. And what we're doing in Ventures is to make some selective investments to enable PEXA to be joined up into that rewiring. There's a couple of different ways we do that, one of which is through our launchpad activity. So that's a very small effectively start-up ideas, a bit of a sandbox, come and play with us for a bit. If it's interesting, we'll help you take it forward, and we have 2 of those at the moment, which are active out of about 100 which have been through our sandbox. And then there's a more traditional venturing-type activity, not at very early stage as would be the case with some B2C, but a bit later stage in the business model's development.

[Operator Instructions] We'll go back to questions from the floor. Thank you.

It's Ed Henning from CLSA, again. Just going back to the market value that you talked about with the potential going forward, why are you only targeting $50 million? It seems quite low for someone that -- you've talked about your data advantage there. Can you just touch on that? And also on the $50 million, is that a run rate target for '25 or is that a period end target for FY '25?

Run rate, in my view, but obviously, I'm going to be working a bit harder to try to get there. In terms of the size of the market, what's interesting in that augmented solution is it's still developing. And there are a lot of different players in it, none of which have a very substantial share. I think it remains to be seen how much you can aggregate share as the market develops. So we've taken $50 million, which is around about 5% to 10% of that market. Now clearly, at a personal level, I would hope to do better than that, but at a corporate level [ to go at it will ] what's a not unreasonable view of the world.

It's Angus Wright here from Tribeca. Just a quick question on the market sizing again. And the traditional data market there is sort of $400 million, you're saying you've no interest in pursuing opportunities there. Given your data advantage, will there not be opportunities in that space?

If there's things which come up opportunistically where we can make some money, I'm never going to say no to making money. But in terms of where I could focus my effort, would I rather go up head-to-head through against the [ SII Global ] or infotech or whatever or would I prefer to play in a space which is more open and developing, I'd rather spend my effort on that.

And just a follow-up on next question. The augmented market at the moment being $110 million, who are the key players in that? And I guess, what are the key products currently?

There's a range of very small -- well, a reasonable size small businesses and then there's some more proptechy-type players. So a good example is Archistar, there's Landchecker itself, there's some smaller businesses which are focused particularly on the local government and government sector in terms of land information provision. There's also some offerings from REA, Domain and CoreLogic into that market. The interesting thing for them though is a lot of their offerings are also more a, I suppose, traditional end of the market. So the difficulty for them as they think about entering those markets and the things they need to manage is how do they manage their back book of traditional business, which has got a one set of economics and then building out a new set of businesses with a different set of economics [indiscernible] through the build cycle.

We have a question from the live stream, [ Niel Lucas from Ethic]. Scott, can you talk about the sensitivities or restrictions with monetizing PEXA's data set? And what actions do you need to take to enable?

Yes. Very good question. The -- as you would appreciate, PEXA Exchange business is a heavily regulated business as it should be. And there are also regulations around how you can use data. We've had reasonable success in going to the regulators to obtain the appropriate permissions. We don't always get everything that we want, but equally, we've got a fair chunk of the things we wanted as well. What we would also say as PEXA is that both community value and individual value and indeed, our corporate value is maximized by a regime of open data. And so we're working with regulators and other authorities to pose a lobby for that approach to data. Now that obviously has to be circumscribed by good privacy -- application with privacy principles and application of good ethical use data principles. But subject to those, I think the broad consensus across the community is that open data is more useful than closed data. Now that's already come to markets such as banking, and it's coming to utilities from January next year. I think there's a bit of work to do in the land information market to move it in that direction. And from our perspective, we would rather compete on the quality of the solutions and the quality of the capability that we can bring to bear rather than purely on just locking up data. And the margins are higher and the solutions are in there and the raw data or anyway.

Just in regard to the margin, you talked about before the 30% to 40% in most sort of traditional data businesses of the cost base, half of it is public COGS, which is just buying down from other people, you've obviously got a competitive advantage there. Is that across all the businesses? Or is that just isolated in the traditional? And how do you think about that sort of competitive advantage?

The -- I'll answer it in a slightly different way, which is we may have an advantage on some of the data that we have. But equally, if you're going to build these sorts of products, you need more data science capability. So you may have a bit of a swap around of labor versus the raw data to build out the ultimate product. In terms of the land, the margin observations, I've extrapolated those from probably more traditional businesses because a lot of the other businesses are at an earlier stage. Having said that, REA and Domain obviously EBITDA margins in their core Australian business is in excess of 50%, but they're in a particularly privileged position because they get the data they want for free and then charge people for it. We're not quite the same as that. So you go, all right, well, maybe not quite as high as theirs, but I think they're still reasonable.

Just coming back to the way that you expect the revenue to build up in this business and perhaps relating back to the $50 million. If individual customers really embrace the products that you're planning to launch, is there a prospect that a bank or a state government could make up a decent percentage of that $50 million or is this a case where you've got to sort of get into a whole lot of doors and build up the proposition and have a lot of customers to sort of get there and then the growth comes from there?

The way it builds for these sorts of products is you get reference sites. So you've got to get in with one reasonable reference site and then build out from there. So it tends to go a bit of an S-curve actually rather than a sort of a linear.

So I guess you were trying to project what the biggest customer could be generating in revenue in 3 years' time. You got a feel for that?

Not yet. Not yet. A bit early to tell. All right, it looks like we're done with the questions. Thank you very much for your attention and input and questions. I now have the privilege of handing over to my colleagues, Gary and James, who are doing a terrific job of building out our U.K. business.

Good morning, everyone. Thanks for joining us today. I'm here with my twin, Gary. Gary -- don't be fooled by his accent, he's based out of Melbourne and on a daily basis, makes me look good. He's doing all the heavy lifting here in [ Aus ] and I'm James Bawa, I've being Chief Executive of PEXA U.K. since September 2020. So just want to canter through a few quick slides, and I think the real excitement is going to come in the questions. I'm certainly hopeful for a lot of questions from yourselves. So for me, the story starts a few years ago, we heard -- and this is for myself as a U.K. lender, we'd heard about what PEXA had done. But when I joined PEXA, I understood that a number of the larger lenders from the U.K. have been over to Australia to see what PEXA have been up to with a view to perhaps replicating that themselves. And I think they quickly deduced, this couldn't be replicated by a single lender or a group of lenders. This needed some firepower. And as we've been out with the financial institutions in the U.K. that really has galvanized our thinking as to why PEXA is the only party that can do that. And I've kind of shot these up. So the first thing was it's the credibility of what PEXA achieved over the last decade, that $0.5 billion of IP that's been put in. I think the second part of the equation is the one that we're really capitalized in the U.K., and that's the real differentiator. We call the staff that work for us Pexarians. And actually, what the FIIs in the U.K. were really taken by is the ability to move a market. This is one of the largest sectors in the U.K. And actually, we're moving the whole market. So we've got what I call our unicorns who were through the first part of this journey with PEXA, PEXA 1.0, they've come into the U.K. and today, they're helping us orchestrate that change because it's not just about getting financial institutions signed up, there are many actors in this ecosystem. And that's what's actually galvanizing financial institutions and others to come with PEXA, because many have tried this before in the U.K., they'd had a little dabble, it's been tilled off. But PEXA is the only one that's got that IP, that pedigree and that track record, years, years and years of investment, and that's really what's actually giving the confidence to the U.K. market that we're the ones that are going to do this and actually are now delivering. And then the work that Gary and many other colleagues have done over many years with [ Ascensia ] speaks for itself and more recently Thoughtworks. If you look at the record pace of speed that Thoughtworks have mobilized from March last year to March this year, they've built the seventh net payment scheme in under a year. And we have people in 4 countries working on this, and that is a mammoth, mammoth task and again, PEXA is the one with the credibility. And then the wider ecosystem, so whether it's the tech companies that the financial institutions use today, whether it's the conveyancing, all those APIs, all those behavior changes that are required, again, that's where the IP and the Pexarians come in. And so we're transferring that knowledge into staff in the U.K. today. And it's a combination of all of those that gives PEXA the credibility and why we're winning the market in the U.K. and been able to achieve so much so quickly. So given PEXA's success in Australia, obviously, the slide rule was put over in many markets, and the U.K. was the one decided on. And so why? First, the Torrens title gives us a natural advantage. A lot of similarities, a lot of that IP carries over. We're not arrogant enough to suggest it's all, we've had discovery teams working for years on this. But actually, there are some nuances to each market. The U.K. is probably one of the most complicated markets in the world, and we're almost there. And so that Torrens title helps us know end. The Bank of England, they're our best friends, okay? The Central Bank and PEXA Pay is the jewel in the crown. So we'll perhaps come on to that more, Gary will talk to that. But having the credibility of the central bank has really opened doors for us. Ease of doing business, what's not to like? So if you look at the last couple of years post-COVID, both governments have put stimulus in. The only challenge in the U.K. is the balloon just kept on getting squeezed in the conveyancing space. PEXA is coming along as a private company. It's offering a solution. It's opening up the bandwidth of that conveyancing market. HMLR, HMRC, we're bringing real value adds and real dollars into this, real credibility, what's not to like. So it's been -- I obviously don't want to tell my masters how easy it's been. It's been all blood, sweat and toil, but there's a lot of people wanting us to succeed in very high places, and you'll probably have seen some of that. We've tapped transactions. So for those of you who worked in the U.K., our national past time is talking about our property transactions over dinner parties. You look at even the darkest hours in the recession, we carry on trading. And we're talking about a market some 3x the size of Australia. Those transactions are there to go after, this is going to be a very fruity interesting market. And then you've obviously got the population, you've got the same language, while some say, but I've had to learn a whole lot of new words since I've been over here. So I think on the best part, we don't speak the same language. So -- and then you've got the market size, which we touched on, some 3x the size, what's not to like? Gary, do you want to perhaps chip in?

Thanks, James. You can tell James' passion for what we've done. And James is a proud Pexarian, as we all are. We've brought James across for this week and next to really bring him into the business to help him understand what is unique and special about what we do here at PEXA, which is not just about technology, it's actually about the culture of the IP, the experience, the way in which we treat our members and how we see ourselves as the custodians of this community. Now when you look at the ecosystem, which is up on the slide behind me, this is the role that we play. We are the custodians of this connected community. And we do 2 things that I just want to call out on this slide. The first thing is the way in which we actually orchestrate the workspace, and I'll come on in a second just to walk you through what that actually looks like. So we bring together participants in a transaction. And you'll see we -- this is the example for remortgage, and we work on behalf of the borrower, where there's an existing lender, which is normally the outgoing lender, but then we've got the incoming lender, which works with PEXA. We then integrate into the land registry where we pull information from the registry, that populates our documentation and then we launch directly with HMLR, so the land registry. The conveyancers and the practitioners play a role in that. And then the settlement and the lodgement of the completion as we call it in the U.K., the actual lodgement into the land registry is ordered by the platform and our payment is supported for us by the Bank of England. So that's the first place -- the first picture is the workspace orchestration. And then the second thing is the payment scheme. So let me just jump on to give you a quick overview of the solution. Now I'm going to keep it reasonably high level because I don't want to get into too much detail. And this is absolutely IP that is core to the PEXA proposition. So the way in which we actually expand our business, move into new markets is all about the people, and it's about the experience and the depth of talent that we have in this team, as James said, across 4 countries now and working with blue-chip partners like AWS and like our partners at Thoughtworks and Accenture. But in particular, we're really proud of our relationship with both the Bank of England and ClearBank. So first of all, the Bank of England. What we've been working with the Bank of England for a number of years, we have a really tight close-knit working relationship with them, and we feel incredibly privileged when we speak to our lenders in the U.K. we see the PEXA badge alongside the Bank of England. And we speak with great pride when we talk about our payment scheme, PEXA Payment, it's been the seventh net settlement payment scheme in the U.K., it's phenomenal. And that -- as James said, the speed at which we've gone from a relative standing start in March last year to now having the scheme live in March this year, and this scheme is now live. And that scheme will have lenders transacting through it later this year, which when you consider the history of PEXA from 2010 when we first formed as [indiscernible] to where we are now in 2022, the speed at which we've been able to do this the second time around, because we've done this before, is phenomenal. And as we start to think about international, whilst our focus at the minute is absolutely on getting the U.K. done, we will be looking at other jurisdictions, and we'll take the learnings of the Australian market, we'll take the learnings of the U.K. market and then we'll think about how do we actually replicate this and do this again and whatever that next market could be. Let me just briefly reflect on ClearBank. So we search [indiscernible] for a transaction bank in the U.K., and just as we do with all of our partners, we're very specific and targeted in terms of who we deal with. We look for blue-chip premium partners, and we look at their culture, we look at their values, we look at their strategy, we look at their aspirations and we ensure that for our blue-chip premium partners that complete alignment with what we're trying to do and what they're trying to do in terms of direction. ClearBank are a great example of whether there's absolute alignment between what we're trying to do and what they're trying to do. Now the role that they play in this sort of schematic of our platform, it's the 3 elements around workspace in settlement and lodgement. And you can see the participants that come into the workspace are primarily financial institutions and practitioners, so the FIIs and conveyancers. The borrower sits off to the side. But in due course, as we do in Australia, there's no reason why we can't provide borrowers visibility of the transaction through the workspace, but primarily for the remortgage for day 1, it will be the FIIs and the practitioners that are coming into our workspace to transact. And we play this role of custodian of bringing them together within the workspace in a secure environment to allow them to converse with each other in order to get transactions done on behalf of the customer. For participants of a transaction that are members of the PEXA platform, we use the Bank of England in terms of how we net the payment together for the FI and then periodically throughout the course of the day as part of being a net deferred settlement scheme provider we settled through the Bank of England and using the RTGS account of the lender, the Bank of England settles on our behalf. So we're not holding cash, we're passing messages through the Bank of England to move money through the banking system. Now the beauty of the ClearBank relationship is where we have a participant in a transaction. And in the early days, there will be participants that are not members of the PEXA scheme. We will be able to still transact with that lender. That's very much different to how we started in Aus. In Aus if you didn't have a participant that was enabled through PEXA, the transaction would fall out and revert back to manual. That's not the case in the U.K. We can actually do a transaction whereby we have participants in this scheme and nonparticipants where we can pay the cash away through ClearBank and that's a really important point. Now obviously, in terms of our sort of future with ClearBank, we expect that over a period of time, as we start to reach levels of penetration greater in our day 1 member volume, we'll start to see some of that ClearBank volume drop off as more of the payments are pushed through the Bank of England and through the PEXA Pay scheme. But we expect to have a long-standing relationship with ClearBank and we really look forward to being a part of their story just as much as they'll be part of our story going forwards. So with that, I'll probably pass you back to James and let James talk you through some of the benefits for the lenders specifically.

Thank you, Gary. So really, in terms of what's in it for the lenders. So we've taken a lend first approach. We followed the money. And we've got a whole raft of these up there. But I just wanted to make a couple of these come alive. So if we looked at the customer experience, what we did was some very, very long deep dives. I did dozens and dozens of these myself before the team took over with the larger the mid-tier and the smaller lenders. And we've got a very good shape of how the benefits were starting to come through. And we were having a conversation with a FTSE 100 bank, and they had some really good data on the calls that hit their call center to do with conveyancing. One million calls the previous year they'd taken and that we went through the proximate cause of why those calls had been made. And they asked us, "Can you track these calls?" Well, of course, we can track them. But what we said to them is, when we look, if your analysis is right, 25% to 40% of those calls will no longer exist in a PEXA world, they disappear. We compress that, we digitalize it. What's 250,000 to 400,000 calls taken away worth to you at 6 minutes a call, what's the Net Promoter Score worth to you? What's the fallout rate? Another large lender was saying to us that people had started this process, especially in the days when the government putting the stimulus through. And because it elongated out, people were dropping out. So the brokers were pretty fagged off with that. Lenders were pretty fagged off, customers pretty fagged off. And their data suggested 18% were falling out of that equation. They've paid all the acquisition cost. Now we think perhaps 5% to 10% is quite conservative. But just from a customer perspective, from a lender perspective, suddenly these things started coming alive to us, increased efficiency. So Bank of England. So I speak as an ex lender. And our reputation was everything, our customer reputation was everything. So let's say, a remo going through -- sorry, a refi, I've got to speak the language, haven't I? Refi. The refi is going through on a Friday. So to be sure, to be sure, to be sure as the Irish would say, on a Wednesday, we would send the CHAPS payment off to the conveyancer. So we did not want our reputation [indiscernible]. So the conveyancer would hang on to it. On the Friday, they would start sending those CHAPS payments off. Well, what happens now, 8:40 in the morning, 6 times a day, for a much longer period during the day, we net off with bank A to bank B through the Central Bank's pipes, PEXA Pay nets off. So suddenly, those lenders didn't have the cost of that liquidity for another day or two or cost to carry as we call it, and that's a big number. If you think of the conveyancers, they're taking a clip on the other side when your money is coming back as well. And so suddenly, we started finding liquidity benefits. If you take the final one, HMLR. And you guys have been pretty used to it in Australia for a fair few years now. But HMLR have an error or requisition rate in the U.K. of 25% to 30%, almost identical to what was the situation in Australia, Gary and the other guys told me 10 years ago. In Australia, that's now down 0.6%. We see no reason why we aren't able to replicate this in the U.K. Suddenly, our bestie friends are now HMLR. You can think of the volumes. But let's look at it through the eyes of one of our larger lenders. Okay, a FTSE bank. Because of the volume that's now stuck in HMLR, $1.5 billion of properties, they haven't got true title on, haven't been confirmed by HMLR because of the backlog 6 months later. And because all of the challenges that HMLR have with call after call after call, they aren't allowed to ring and inquiry for the first 6 months because that's not seen as essential. So they're sitting on $1.5 billion of loans, they haven't got true title of and they're now having to put capital in their pillow, too, just in case. Now that capital gets released and then the insurances, and, and, and. So when we started looking at it through the lender lens, and this is where it was very helpful having worked in this institution, we could actually look across the silos. We didn't talk to them about their capital benefits. We didn't talk to them about the liquidity benefits because if you've ever done an ICAAP or an ILAAP as I have, you never want to go in near one of those ever again. We just talked about some of the operational and the customer benefits and suddenly we were into figures that wasn't unusual to see, $0.25 billion for the lenders. So follow the dollars. So really, just looking at some of the other benefits from a customer perspective, we did an awful lot of research in this market before we went in. We had boots on the ground for many years. A few years ago, what the customers were saying to us is they get the offer letter from the lenders and probably very similar to Australia, lenders had done a lot of good work, automating that, getting you an offer letter, and our customers were running down the street saying, "You retail, I'm going to get this great deal." And then as the customer said, it went into a black hole. And then we saw that from 6 weeks go out to 12 weeks when COVID hit, just for a remortgage or a refi. Now, we're starting to see some -- the mood, music change, not just from customers but from lenders at the moment, probably very similar to Australia. What we're now seeing is that cost of living really starting to hit, the wallet size shrinkage. And you'll have probably seen our governments be looking at, can we move the car, MOTs out from one year to another and save GBP 45? Well, U.K. Finance is suggesting that the remo market is going to increase by about 20% in the next year or 2 as people start trying to say we think between GBP 300 and GBP 500. Now, I'd love to tell you this is all part of my cunning plan by coming to market just at the right moment, the rubber's going to hit the road, but you work it out. Okay. This is a sweet moment, I think, for remos coming up and PEXA's coming into the market just at that point in time, but you'd probably better decide it. So land registry. What 25% [ aero ] requisition rate down 0.6 worth to them. You can see why they're engaged with us. Equally, we're talking to lenders just as we did in Australia, about 1 deed, 1 deed. One of the lenders that we're working with have 7 at this moment in time. A significant of title, we can digitize that. And actually, suddenly, land registry are seeing phenomenal benefits, but it's more than just a transaction with land register. We're now dealing with our strategy team. And it's the first time in my life, I've actually been core part of the future. What we're seeing in the U.K. is that PEXA's now 5, 6 years more mature than the U.K., and we can also see out in Australia we're actually helping with the thought leadership, looking out for land registry. So what's not to like? And we've started the discussions with HMRC as well because we're going to accelerate the collection of taxes when we get on the sale and purchase. So government and regulators. Again, property is something that I believe most governments use as a weapon of choice to ensure a vibrant economy. And what we saw were 2 countries, Australia, the U.K. put stimulus in. And no matter how much stimulus the U.K. government put in, it just kept on getting squeezed in the conveyancing space. So we've been able to talk to politicians, we've been able to talk to treasury, and what we're offering and able to, within a few months offer, is an ability to move beyond what you guys will probably know as bulk conveyances. So I talked to a lender 12 months ago, one of the top 3 lenders. They were doing 980 remos a day. They like the margin. They like the risk. They just couldn't find any more conveyancing capacity in the market. So what we've been doing in the U.K. to get the bulk conveyances fired up and excited, I'm playing with you a little bit there, is we've been going to the mid-tier. Now these guys have been frozen out. They haven't had the dollars to invest, and guess what, We've given them the kit. And suddenly, they're now chasing the bulk conveyances and the market is opening up to them. And then we will also turn to the High Street. 5,000, 10,000 in the High Street haven't been able to do remo. We'll open up that, we'll give them the kit and suddenly the playing fields level up. So that's really exciting. Many of those in Parliament that we've been talking to exciting treasury just at a time when the U.K. is probably going to need some help. And then if we take the conduct authority -- I work for the conductor -- financial conduct authority for 6 years. Good consumer outcomes, remortgage in the last few years has been dropping. Now for a whole raft of reasons, interest rates have been low. We put a lot of friction into it. Lenders are wanting to protect their book, et cetera, et cetera. That's not a good consumer outcome. They stay on an internal transfer. It's suboptimal and so on and so forth. Well, guess what, PEXA comes along. Their ambition and our ambition is to make a remortgage or refi as frictionless as an internal transfer and we're going to help us with that. So from a conduct perspective, game on. And I think the other thing that probably I'd love to pretend to, I knew the real power of the kit that we had is one of the things that PEXA is able to do is repay debts as well. So if you think a lot of people take a refinance and they also pay down the car loan and other things at the same time, one of the larger lenders were saying to us that their data was suggesting that 50% promised to pay it off and didn't. Now the conduct authority is really interested in that. And what we found as we went through the industry was a lot of lenders had their hands slapped by the regulator because it wasn't a good consumer outcome. They were lending and getting people more into debt. Now what PEXA does, to Gary's point, is orchestrate the repayment of that debt. We, through ClearBank, drop the repayments off, one and done. So that actually meant a lot of lenders saw PEXA as a way of complying, so queuing up. So I never thought I'd be having a compliance play here. A number of lenders said we can go back into that market having had a slap before, and another number of lenders also looked at this and said, "I'll tell you what, it's going to take the market a bit of time to catch up on the risk premium, we can go and actually start doing some debt con and taking the higher margin for a while before the industry catches up." What's not to like? So I don't know. I think perhaps, Gary, do you want to have a look through the -- just canter through this, would you? Yes. So we spend it around.

All right course. I did very briefly mention earlier the progress that we've made today, but this slide sort of calls out how far we've come and how far we're likely to get in the short period of time. I will contrast that with our Australian experience, which was -- the [ net mill ] was first formed in 2010 with the name change to PEXA in 2014. We transacted our first transaction, I think it was back end of 2013, having informed in 2010, so 3 years to that first transaction. From '15 through to '18, that's when we really started to see the industry transform of the banks and the practice the [ conventions ], the lawyers start to really get into using PEXA and see the benefit. And then we started to see the network really kick in. 2020 through to 2022 was where, I guess, PEXA really played a role, specifically across certain states where uptake had perhaps not been as aggressive as previous state. But we played a role providing that resilient that resilience to keep the country transacting property as we started to trade through in that 2-year COVID period. And that's sort of to where we are today, 12 years later. Where we are right now, we started this build -- the business case was first approved back end of 2020 by the Board. We brought [indiscernible] in March, and then we started this first piece of work around the payment scheme. The reason why we built the payment scheme, and we did that first was because of the Bank of England, if you're not aware, are going through a significant upgrade of the RTGS system. That upgrade will run probably through to at least 2024, assuming that they hit the timelines that they've set for themselves. So it -- both is a 2-year window, either do this now and then build a platform around the payment scheme or we wait until after the RTGS upgrade, then we build the payment scheme and the platform but were the last 2 years. And as James has said, the market is moving rapidly. So we mobilized the team really quickly, a little bit like, as I've said to James before, what we've done is like installing a kitchen in a house that's not yet built, but we needed to do that to get a head start on the RTGS upgrade. And what we're now doing is building around the payment scheme, and when we go live later this year, that will be the platform and the payment scheme life so we can get people transacted through the scheme. But it's bought is that period of time as the Bank of England start to slow down, change through their organization, and it will potentially give us a first-mover advantage and some competitive advantage should any other potential player choose to come and play in this particular market. It's a really important point. So where we are now, we've got the remortgage product that will be in market later this year. We've already started working on sale purchase. We know that sell purchase is really where large pools of revenue potentially sit. And it's our expectation that we'll be in market with a sale purchase product, probably 12 months after we start building -- we're likely to start build later this year. So we'll have something by the back end of 2023 and in market '24. But the sale purchase work is really important to us. A lot of the heavy lifting on the remortgage, which is primarily around the infrastructure, the security and all the companies running a platform like this, all of that is in place in the payment scheme and it's fit for purpose. However, we don't underestimate how much work is required on sale purchase. It will be complex that there are more actors in a sale purchase transaction, but we're just working through what that looks like right now. And before we start building anything, we'll have a clear understanding of what that actually is before we embark upon that. But that's sort of where we're at. So I was saying to Glenn yesterday, given where we are, 14 months in, the progress that we've made in comparison to where we were when we started this journey in 2010 is quite phenomenal. And we've achieved that through a whole team of people, as James said, across 4 different countries. And we've done that by selecting and working with some very, very high-quality partners that are really sort of coming to PEXA and give us an accelerated start on what is quite an exciting future in terms of international expansion. So that, we'll probably leave it and maybe, hand it to questions.

So before we do a to that, to call out, okay? One is I've worked for a lot of institutions in the last 40 years. And I think the key is when you've got something at this pace over 4 countries with hundreds of people, it really starts at the top -- the tone from the top. Whether it's from Glenn, but actually working with Gary 24/7. So I will go to bed at a silly hour, I wake up 6 hours later and the world has changed, and Gary has already done it. So this is a 24/7 operation turbocharged to get to market. And as Gary said, the Bank of England have locked out now from March this year for 2 years. This is our market. It's ours. And the clue is in PEXA Pay. That's at the heart of what we're doing. We cannot have anyone touch that for at least 2 years and they need $0.5 billion of IP as well.

Brendan Carrig from Macquarie. So just in terms of that 2 years then, so targeting the 25% to 40%, is it fair to assume that in that target, that there's limited competition expected in that? And so you more about getting your share of the market with no competitors or at least, the old process being the competitor in that 25% to 40%?

So I don't think there's any competition. I know that sounds arrogant. It's not -- we're a very humble organization. We've got little actors having a little nibble at the parts of the process. But the orchestration, the settlement and the lodgement put together is phenomenal. So I don't see that there's any competition, but we're not complacent. So we're actually putting our foot to the floor, we'll have a couple of institutions on this year. Why I say a couple, our original intention was to put our first reference site on this year. Perhaps I'm bitter and twisted after all the years. If I put one on, you'll say it's a fluke, so let's go for 2. And then throughout '23, we'll start crawl, walk, run. We'll start putting more institutions on in '23. When the Bank of England start opening the doors in '24, let's get the rest on. So I see that by the end of '24, '25, we've got that 25-plus percent of the market.

And just in terms of ClearBank, obviously, it's a great outcome in the near-term given the RTGS upgrades going on at BOE. Does that not over time, enable others to potentially compete against you? Or how does the ClearBank relationship work if they were to offer settlements for a potential competitor?

Well, the way that our team operates and Gary can perhaps pick up is lender A, through PEXA Pay to lender B, orchestrates a net settlement. So what ClearBank are doing in the interim for us is where lender B isn't on, they're actually dropping it into their clearing bank. And over time, that volume does go down. But what ClearBank will always be doing for us is where lender A paying back lender B or netting off lender B and paying off debt, ClearBank will be the party that does that for us and facilitates the third-party payment. Gary, do you want to add anything more to that?

Yes. Well -- so Brendan, I think your assumption is a safe assumption in terms of competition, but there are proptechs and legal techs and fintechs. And as James said, they're doing elements of this. And you're absolutely spot on the payments piece regarding ClearBank. The reality is we do so much more than this. And we do try to position ourselves as the custodians of the community. We're a friend to industry, and we bring participants together. And therefore, that role that we play within industry is not just about the payments piece, that's really important because it gives us that runway. But the role that we play more broadly is a custodian in the industry, bringing participants together specifically around the Workspace. And the role that we play with our connections into government, that's really, really important. And we believe having done this previously and had experience over the last 10 or 12 years, that is a real point of difference for us as we start to stretch our legs into new markets.

One more, if I may. Just on the price discovery process. So given the efficiencies that you provide to financial institutions in the first instance. Can you just explain how that process might work and how it may compare to what we see in the Australian market?

So under pain of depth, I can't go into price because it's quite a sensitive one at this moment in time. But we have proved to the financial institutions and others in the ecosystem, the real value without the capital, without liquidity, the numbers are phenomenal. And I think actually what lenders haven't realized is little college industries have started to appear all over where people are cranking the handle. So I think we're still in those sensitive discussions on price, but I've got a smile on my face.

Just a quick follow-up to that. When do you think we'll know when we decide on the price, what's the timing of that?

So our first reference site goes live in quarter 3. So we've got some sensitive conversations on -- The confidentiality is working both ways. So some of the lenders are very sensitive about us naming when they're coming on board. So as the reference sites go on, we'll be alerting you too, and I bet you, they'll tell you the price.

To confirm there'll be one price, so the first price we see is the price and it will be the same price.

So it's the same price, whether you're a one [indiscernible] lender or whether you're the largest in the U.K. However, what I would say is, unlike Australia, we don't have the same pricing caps or sensitivities, so the market will decide. And we're not going to leave any money on the table.

Liz Miliatis from Jarden. First one would be just on your timeline previously. Obviously, you've got some shorter targets and then longer-term targets. In terms of hitting those, are they sort of stretch targets? Or are you very comfortable that you'll hit them and potentially even exceed them?

So are you asking with my boss in the room or out of the room?

Out of the room.

Okay. These are doable. Because what we do is we do what we say, okay? So I think talk is cheap. So over the years, people come, snake oil salesman, promising you this and promising you that. In quarter 3, we will have our first reference site up. We will also look to put another reference site on this year. And I think the proof of the pudding is in the [indiscernible]. And so then we can actually show yourselves. We can show other lenders, we can show -- so it's not just the financial institution. We've had to put the conveyancing component in, we've had to put the other actors in. So I think the key is to get those reference sites up and then start moving at pace. And there's always, always the urge to go and blow the doors off with the largest one. For me, the safe way to do this is you go crawl, walk, run. And so each time we put a reference site on, we'll be putting different nuances and different degrees of challenge so that we can build that U.K. experience up. But I think the key is to say to everyone in the ecosystem, have a look. It's working and it's there, up and running. So it's ambitious. It's 24/7 over 4 countries, but we've done everything we said in record time. We will have those reference sites up this year. Gary, is there anything else you want to add? You want to say this or fine and dandy?

I think these are absolutely our assumptions in terms of going into this. But as always, with these things, when you're trying to create a market and transform a market, you do that with your customers in mind. So the conversations that are taking place right now with ultimately, the users of our platform is what do they need? What are the problems that we're trying to solve and what's the opportunity that we're trying to exploit. And we'll work with them, and we run agile, right the way across all of our teams. And we're dropping features all the time. We set them at the back of toggles, so we can toggle them on and we can toggle them off if we need to be based upon individual users. But we'll be driven at a pace that our prospective members as [ others ]. And if they want it to go faster and we can make priority calls, we'll make that call and we'll go faster. If they're not quite ready, because remember, this is about a community of people that all have to transact at the same time are therefore moving unison with each other. And therefore, we'll nudge them on that journey, but if they're not quite ready, then we'll slow them down and we'll go somewhere else. That's the play.

And just a follow-on question then. In terms of your market share and sort of getting to breakeven, at what point do you think that the U.K. part of the business will be breakeven?

So in terms of remo, we're estimating that at 2025.

Kieran [indiscernible], Jarden. Just a follow-up question to that. When you engage with regulators, are they making you think forward or around interoperability already at this point?

Great question. So I've been in the industry for 40 years. Since 1988, I've been regulated. I've worked for the Regulator for 12 years, and I've been begging the Regulator to regulate us. I never thought it would happen. But what PEXA does isn't regulated. So we've had really good conversations with Treasury, Bank of England and the like, and I think as hard as we try to be at regulated, there isn't the appetite to regulate us yet. However, they recognize that PEXA will become a systemic risk to the U.K. And so that is the kicker when they will pull the regulation in. And in our conversations with Treasury, and we have these monthly quarterly with some of the other actors, they're talking of us engaging with them towards the end of '24. So I'll leave you with that sort of hint. Now, what we've done is we don't want a massive transition at the end of '24 because by then, we've got the foot to the floor, sale and purchases coming on, we've got the pipeline of remo building and the lenders onboarding, the Bank of England constraints are off, hopefully. So we've got the rubber on the road. So I don't want to go through a massive transition to a regulated entity. So what we've started from day 1 we've taken it, we're going to set ourselves up and operate from day 1 as best as we can as a regulated entity. So all the executive team have held senior manager functions in other financial institutions or certified functions. The audit trails, the corporate governance oversight from day 1, we're trying to get as close to regulator ready. So if the regulator says, look, you guys have run ahead, I'm not saying we can do it overnight, but we can move really at pace. I do not want the worst-case scenario where someone says, within 3 or 6 months, you've got to be regulated, and it slows our business down. So we're doing it from day 1 in anticipation. Does that make sense? I think it's a good discipline.

Second question in terms of sort of initially, obviously, you're dealing with a much larger pool of lenders than here in Australia, and you've got ClearBank office now able to settle with those non-PEXA lenders. But -- So how do those parties -- how does it work from a workflow point of view on the platform initially with sort of those non-PEXA lenders?

Well, you talk about larger lenders, actually, we love all our customers equally, but I'll let Gary answer that one.

For the nonparticipants, they're not in the platform. So it's only the PEXA members that are actually in the platform processing the workflow, so they've got one side of the workflow. For the other lender, they'll be working through whatever their existing origination processes. Now our experience in this market was when you have one group of lenders working in a certain way, and then the transaction is potentially problematic for the other lender. They hold each other to account, and that's how the network effect. When you get to 15% to 20%, that's how that starts to ratchet. So we would expect that we will have a group of lenders that are using the platform. We'll have a bunch of lenders that aren't, but I would expect there will be, some extent, there will be a fear of missing out to some extent for the lenders that aren't PEXA-enabled.

I just pick up on that, if I may. So just an anecdotable comment last week from one of the larger lenders. They saw PEXA like a bath. So they have this bath full of mortgages. And so traditionally, the taps are on and they bring new mortgages in and the refis drop out the bottom. If they're not on the PEXA platform, someone rip the bottom out of the bath and their refis are falling out twice as fast as they can top it up. Guess what's happening to the bath water. And as I said, it puts the fear of God in them, because we have a remo market about to takeoff, a government that wants the remo market to take off because of the wallet size shrinkage and the cost of living. And if they're not on the PEXA platform, this is going to be very, very painful to Gary's point. So if you're holding any U.K. banking stock, the question I'd be asking is when are you going to be on the PEXA platform. That's the question to ask.

And the economics of the costs, from your perspective, are they different because you may not have sort of a higher proportion of the lenders on the platform?

I think we're tracking to our expectations. Yes.

Okay.

Did I answer that?

Well, I guess it's more around whether or not there are more manual sort of processes around your platform, early days as a proportion of lenders and sort of [ lens ].

Sorry. So Gary, you want to take that one?

Think -- are you looking at this sort of the lens of the lender in terms of lender cost? Yes, absolutely for any large transformation in a large lender. And as Glenn alluded to, I've got a background in doing this in a large Australian bank. I've seen this from the other side. So in my previous role, a large team running end-to-end right away across from credit through to settlement. There was probably 200 people across the country in different sites doing physical settlements. And therefore, the business case was to transition from, I guess, a world whereby it was heavily manual with large amounts of rework and requisitions from each of the various registries across the country and moving on to, I guess, a frictionless improved transparent customer experience. That was a business case. And it did mean that the number of bodies that we had would drop down, but we still need to put things on keys regarding PEXA, but there is an efficiency dividend that ultimately justifies the investment in transformation. However, like all transformations, occasionally, you have to go up before you can come down. And therefore, it does require an investment. And what James and team are doing. They're working really closely with lenders to help them understand what does that look like, and therefore, how do they -- James touched on some of the lender benefits. But how do you make the benefit case? How do you write the business case to ultimately get the customer experience, get the operational resilience, get the capacity created to do other things and how to get right that business case whilst at the same time, appropriately investing in a platform like PEXA? But we are working with lenders and we'll work with practitioners and the broader market to help them do that, having done it before, having got lots of experience in this.

Thank you. We have a few questions from the live stream. So I'll start with Hugo. With the recent climb, at what point in the Australian expansion story did price caps come into place? And do you think it will be a similar story for the U.K.?

So do you want to perhaps pick up on the price cap in Australia and then I'll pick up on the U.K.?

Yes, I think it's a hard one to call. As James said, the reg regime in the U.K. at the minute is fundamentally different to the reg regime that we have in this market and is the reason why there are certain constraints with regards to pricing. But from a U.K. perspective, that's not -- we're working on the assumption that, that's not something that we'll have to give any due consideration to any time soon.

A few questions from [indiscernible] at Atic. What are the key issues that will accelerate or put a handbrake on your execution targets?

Within the U.K.?

Yes. First question.

So I think there already is one, and I think it's limited capacity in the Bank of England. So we're really grateful for the Bank of England. They've got a lockdown for 2 years, and yet we still have landing slots. So I think that limits capacity in the first instance. I think the only other is the ability of the lenders to mobilize. So a lot of good intention. Forgive me, I'll use one of my analogies, I'll probably get my hand slapped for it later. I see it like date night, okay? You're both going to a really good expensive place, you're both really excited about where you're going, you know what time you may have been leaving, but your partner is a little bit late because they're getting all togged up. And actually, when you go out, your partner looks stunning, it's a lovely place, you have a really good night, but sometimes just getting that timing right. So the key, I think, is really going to be -- some of the lenders have other things going on. So just keep them coming. So it's best rest ready to go. Once we've got the landing slot, off we go.

Next question from Nat. Can you provide some details on what it takes practically to go from remo to transfers?

Sorry, Ron?

Can you provide some details on what it takes practically for the platform to move from remo to sale and transfer?

Oh, sale and purchase. Sorry, forgive me. So I'll start off and then probably hand over to Gary. So I think a lot of the heavy lifting is done on the remo, whether it's Thoughtworks, whether it's lenders actually getting used to the levers, but I think the biggest issue is behavioral change. And the north star that the U.K. needs and wants, whether it's from government, whether it's from Treasury, whether it's from Bank of England is the sale and purchase market. It is broken. COVID shown a light a on it, we saw all that stimulus go in and it didn't really have the desired effect. So the difference between switching from remo to sale and purchase is not 1 million miles. I think once we get the market and the behavioral change in market, the behavioral change part, which is the toughest part will be easier. In terms of the technology, I'll hand over to Gary.

Yes, it's a good question. I actually don't think it's about the technology, necessarily. I think it's about the customer experience. And I think we -- there are some differences that we know are painful right now, one of which is this whole thing around dumping and how simultaneous settlements can fall apart. So I'm not going to be bold enough to even try and guess what we think the gap is between remortgage and sale purchase, even though we've got some assumptions going in. That discovery work is really important. And I've tried to stress the point that we work with the market to understand what is the opportunity, what is the problem that we're trying to solve. And then we start to build small and then we iterate around what we believe is a problem that we're trying to solve for the customer. If you build big, you build twice. If you're going with a set of assumptions, you're probably wrong. You have to do it with the customer. So we do believe, Ron, that it will be -- it won't be an insignificantly. We're going into this with our eyes wide open. We know that it is complex. But if you think about what we did in this market, this market, there was a number of mandates that were set by government regarding the digital lodgment of documents. And in this market, we try to digitize 100% of all documents across many states and territories. This is not that same problem. This is about remortgage and it's around sale purchase, and it's around working with one land registry and one revenue and customs department, all right? So we -- it will be complex without a doubt. And we're not kidding ourselves that there will be a lot of work required to get it to where we need to get to, but that discovery work is really important. And once we know more about what that looks like, of course, we'll come to market and we'll tell you exactly what that looks like, and we'll give you confirmation on what the time frames are.

The team are now landing in the U.K. So the desktop research is being underway in Australia, the boots' on the ground in the U.K. And Ron, this is -- to me, the analogy I use is a bit like the banking sector in Africa, they just jumped to generation. So I'm not saying we can see into the future, but the maturity of the Australian market is really helped accelerating some of our thinking in the U.K. And to Scott's point from earlier, there's a lot of exciting things happening in the U.K. and Australia. So we're looking on a global way, is there a way of turbocharging that sale and purchase and making it a lot better. I think we've got a fantastic opportunity. That's what's exciting HMLR. That's what's exciting treasury. So I think we can turbocharge and skipper generation in the U.K.

Next question, can you remind us of the investment required to execute to 2025 and 2027 targets?

Okay. So broadly speaking, $30 million this year, $40 million next year, $40 million the year after, and then we wash our face $25 million.

Next question from Scott Russell at UBS. Can you go through the swing factors for achieving the market share targets? How important is the decision-making of the conveyancing industry across the U.K.?

So we started with a financial institution led, and I think that's perfectly right, follow the dollars. So you have in the remo market in the U.K., a number of bulk conveyances. So I have some sympathy for these guys because they've been squeezed by lenders for years. They get a few dollars and they get all the liability pushed out to them. They've invested in front, as Henry Ford said, make the horse go faster. They're very precious about their automated fax machines and their PDFs. And so they didn't want to give that up in a rush. So PEXA comes along and it's -- as with Australia, initially perceived as challenging their world, initially. And that's where having PEXArians come over, and that was that second or third column that we started with. It's about the behavioral change in moving an industry. So they were slower to the party. But then, what you have are these mid-tier conveyances that have wanted to get into this market for years, been frozen out, haven't had the investment. Suddenly the lender is going to pay x bucks per transaction, there is no cost at the moment to the conveyance. We gift Thoughtworks technology -- and that's at the forefront of the race, we give them to the mid-tier. And the mid-tier really excited with the introductions we make to the financial institutions. Now the bulk conveyances can suddenly see that they could lose their market share. So they're now starting to become our best deals as well. And then you have the panel managers who could see that as all this capacity increases in the conveyancing space, where the panel manager has done a really good job making sure that the lenders are fits with their insurances, et cetera, and load balancing in the times of COVID and which -- they could see that, that market could change for them and what's their relevance. So they are also now coming to our door. So I think, Ron, just as Gary started this out by saying, what PEXA did is very collegiately took a market across. So what we're doing in our reference sites is saying, "Look, here are some PEXA-enabled conveyances or we will take one of your conveyances initially and we'll make them -- we'll enable them with PEXA." And now the momentum is moving at quite some pace in the conveyancing space. Gary, do you want to add anything?

Yes. I think the practitioner community is incredibly important to us. As I've said, this is a community and we're the custodians of that community, and we bring participants together. And as we take the learnings of the Australian experience, I'm sure if there are any of our either lawyer or conveyance members listening, they would probably acknowledge that going way, way back, we probably didn't do enough to engage practitioners early on, and they're an incredibly valuable part of our community. We enjoy relationships with banks but equally with the convincing and loyal community. We'll do exactly the same in the U.K. having gone into market, you can understand there's a little bit of nervousness with regards to what we do. But it creates real opportunity for the practitioner market as they start to change their business models and move away from what is sort of heavily admin-intense to offering their clients helping guidance and advice and doing this stuff that's really valuable and PEXA takes all of that out. And it doesn't mean the end of any particular industry or part of the industry. We augment ourselves into the industry, we bring them together, they coalesce around the workspace, and we make life easier for customers. That's our job. So I think it's a great question, and we'll not make the same mistake we made previously. We engage all of the industry, and we want to be friends with everyone.

I'm not trying to hog the mic. There's a few more questions on the live stream, and then we'll go back to the floor here. The next question is from Taylor [indiscernible] at Barrenjoey. How will the revenue model for the U.K. compared to the model for Australia?

In the simplest terms, on it, the market is 3x the size. So I think if you look at our speed to market, you look at a market that's 3x the size and you look at our go-to-market proposition of remo, which if you believe U.K. Finance statistics is going to increase by 20% in the next year or 2 because of the cost of living challenges, this looks good.

Next question from Diana Michele of Australian Ethical. You've mentioned the breakeven point and the differences in the U.K. versus Australia. Can you talk about the medium-term margin expectations for the U.K.? Would you expect similar margins in the U.K. as what we see in Australia when you're at scale?

Okay. So I can't talk pricing because it's very sensitive at this moment. What I would say is that the start of this journey 10 years ago, PEXA went on a journey of discovery. And so it made some mistakes, and it got a lot right. What we were able to do is take that learnings and also take a new piece of kit with Thoughtworks, much more intuitive software, new APIs. And so having been in a 1% margin world, and I'm not advocating that we're going to be anywhere near that 1% margin world, we're going to be very lean in our operation. So we have the advantage of new kit, new APIs, all those learnings that we can actually ensure that the OpEx is much more exciting the second time around, and that will carry over into other territories.

It's Ed Henning from CLSA. Can you just go back to first principle, on starting in the U.K.? I imagine you cut your [indiscernible] with a small lender to make sure there's no bugs in the system, how it rolls out. And then you talked about before, you're obviously engaging more with big lenders. As you go through this process and more knocking on your door and realistically, in your early targets, are you going to have some big lenders, you think, to get on to the platform?

Yes, it's a good question. So crawl, walk, run. So if I describe them as agile lenders. So what I'm looking for in that first cohort are ones with a few nuances, a few nutty problems that then, we'll amplify out. So we've got the first cohort. We will put the first couple of reference sites on that. Actually people, it shows credibility and then actually start making it that we move to perhaps those with bigger scale, learn our craft as we go along with these friendlies. And we'll never get everything done on the first reference site. So I feel quietly confident by the end of next year, we'll have a proposition that's pretty robust that will really stand up to the scaling up in '24. Gary, do you want to add anything?

So just taking the sales process, 2 gents at the front, Glenn, Scott, James and I, we all have deep experience in U.K. financial services. And we also have external advisers in the U.K. with equally deeply connected in U.K. financial services. So having conversations at C-suite with influencers across the lenders is not the problem. What we need to do is make sure that they've got the sufficient bandwidth in order to do what they need to do. We've also got the Bank of England onboarding a lender into dedicated spot with the Bank of England over the course of a period of time. We have to work with them to open up a slot to drop somebody in to test, to get them signed up to get them transacting. So again, it's a very carefully orchestrated process that we have to go through. So our job is to make sure that we fill the order book. Then we'll start to work out how do we actually start to penetrate into the lenders, how do we start to push adoption and then how do we start to get transaction volume through. But it has to be done in a very careful, targeted in a specific way. So we will start with some of the more nimble, more agile, smaller lenders because they can work with us. They're similar. Remember, I said earlier, we partnered with organizations that are aligned with us around culture values and strategy. Working with a large institution is probably for our first transaction, not the right thing to do. You need to start small and be targeted and specific. So we'll do that. And as James said, we gradually start to work our way through once we work through the order book. And if we have lenders that wish to slow down for a period of time, we'll put another one and we'll accelerate them, but we have choices.

And with that, I imagine, obviously, with the ramp-up to market share, it kind of starts very slow and then really ramps up towards the end of year, your target there in '24?

So I think if all my dreams come true, the Bank of England will be on time in the middle of '24. So whilst Gary said, there's a lot of precision now matching with the Bank of England, landing slots. Because they've got the first major upgrade in 26 years, they're catching up with the Central Bank of Australia in some regards. And so when it gets to the middle of 2024, what they're saying to us is we can literally put the lenders on at pace. So our ambition is to really get the process right throughout '23, move certainly in the first half of '24 with those first cohort of lenders that have got the right of passage with the Bank of England and these limited slots. So it's very precision up to the middle of '24. And then subject to the Bank of England being on target for the middle of '24, then they can onboard at quite some pace after that with their new system.

And then just going to your target of [ 25% to 40% ] by '25. Speaking to the lenders, speaking to large lenders because obviously, they're a matter to get at the higher end of the target. Why can't that be higher? Or why have you got confidence that you'll get to there?

So why have I got confidence we'll get to '25.

And then why can you get higher if your thinking of [ lenders ].

I'm obviously going to lowball it with you. I think it's too painful. If you look at the numbers -- and this is why I can't understand why people are not asking the banks, what's your timeline. So one of the things we said to politicians are like we're trying to keep a fair field. So yes, there's a limited number of landing slots during this. We do not want to attract any attention by distorting this market. So we're -- as Glenn has said on many occasions, we're talking to all the lenders, we've spent a lot of time with the top 20 lenders. If you look at the distribution curve, you've got the 5 or 6 have 70% of the market, the top 16 at 94% of the market. Of course, we spent a lot of time with our first [ love ] the top 20, but we've also spent with the rest. We have to show, as Gary has kept on saying, a fair market. We don't want to distort that market. And if you're a lender to back to that bath analogy that's not on PEXA, and your mortgages are flowing out twice as fast as you can get the new ones in, it's going to be very painful to be set out of this game.

And then just the next question on the push towards that sale and purchase, and you talked about the regulator potentially coming in, in '24. Is that a big risk that the sale and purchase such a bigger part of the market revenue for that all of a sudden, the remo market works and the regulator goes, we need to regulate you and the timeline gets pushed out for potentially sale and purchase?

We would embrace the regulator. We would embrace the regulator. And I'll tell you for why everything and the way we operate today in terms of discovery for the lenders, because they're heavily regulated and they're outsourcing to PEXA. So our pedigree with the regulators in Australia, our pedigree with the Central Australian Bank, our pedigree with the Bank of England lends well to that. So we've had to go through the same regulatory scrutiny for our lenders and our clients as if we were regulated in the first instance. So I don't see the difference between regulated and how we're operating today is that big. I don't see it as a distraction. Do you, Gary?

We've said it already. This platform will be ready from day 1. We fully expect, as soon as you start to become critical infrastructure, once you reach a level of materiality, then we will be designated and highly likely will be designated under the payment services regulation, and we are ready for that. We're working on that assumption. That will be a real proof point for us that we're doing the right things. So we've always said reg ready on day 1. We've always said that this thing is built for compliance, and we've said it's secure by design. And of course, it's a payment scheme and we're working with the Bank of England. We're working with large lenders. It has to be secured by design. And we've given a commitment to the lenders that subject to any external assurance and we'll bring in professional services, and we'll give them independent oversight and assurance with regards to the way in which this thing has been built with multilayer controls. So absolutely on day 1, it will be regulated. And we're making sure that through this whole process of building this thing and going to market. We're leaving appropriate audit trail to ensure that should anybody come in and have a look at this business, they will see that it was reg ready from day 1. And that's been a really important design principle for us right the way through this whole thing.

I guess my question is not you being ready, but the regulators themselves and taking time and diving in and then pushing out your start date and sale purchase.

It would be arrogant of us to say that we were upward managing. But this is why we've been engaged with regulators on a monthly or quarterly basis right from the start. So they are appraised month-on-month of where we are, what we're doing. And I wouldn't say we were upward managing, but they have a very good understanding of where we are, how we operate, what our systems and controls are, but they're very, very comfortable for when that moment happens.

One last one for me. If you go back to the relationship with ClearBank. Can you just give us an understanding? Obviously, you've got one bank on one side, another bank that's not on the PEXA platform. Can they use ClearBank to have a look at how quickly it's done? Or is it still going to take a very long time because they're not on your platform to get that clearance just to -- essentially and then we want to use PEXA we'll get onboard because we've seen it through how that's done there?

Good question. ClearBank [indiscernible] transaction bank, that's the role that they play. We've run the workspace and therefore, we provide visibility around process flow or construction and progress, not ClearBank.

[indiscernible] Going to ask 2 questions. Thanks Gary and James. Amazing progress in a short time.

Could you just end it that way?

Amazing, amazing progress in a short time in very challenging times. So well done, guys. Fantastic. I just had a quick question about ClearBank. Besides like [indiscernible], ClearBank can you tell us a little bit more about ClearBank as a very new bank?

Okay. So Basically, after the financial crisis, you may be aware, the U.K. government had to put its hand in its pocket or taxpayers and bail out the banks. And so basically, they ask themselves, how did this happen? How did 5 or 6 banks manage to bring us to our knees. And so an idea was formed of actually having a sort of wholesale bank for the first time in 200 years. So Charles, who got extensively in the banking sector, promoted this idea and actually it was well received by the government because actually, what we're going to do is take away the hold from those banks that brought us to our knees. And so from a very limited humble start, basically, it's a wholesale bank. They now have 220 financial institutions in the U.K. using their kit. And they're also now expanding into Europe. So I know something of this because I nearly joined them to set up the European operation, but that smooth talking Glenn, offered me the chance to make history in the U.K. and make the U.K. a better place. So the fact that they are pioneers, the fact that they challenge the establishment, the fact that they've got today's APIs and they can onboard it pays the sandbox, everything kind of just actually shouted out PEXA. That's exactly what we do. We transform markets, we move at pace. We have an international expansion aspirations and so it was the obvious choice. So we flirted with those big global glacial banks that take forever or you go with someone who actually wants to disrupt the market, who has the same culture and the values as yourself, you shake hands and you move at pace. Does that sort of help? Yes.

For the record as well, I would say that part of my role is running strategic partnerships, including procurement. And with all of our suppliers, we have a very rigorous process in terms of how we put, what we put them through. ClearBank went through that process. So there's an awful lot of due diligence in terms of how we arrived at ClearBank and there were others in the mix as well. So it was -- they were very sort of carefully chosen and to some extent, they chose us as well, right? So it's generally a partnership.

Siddharth Parameswaran from JPMorgan. Just a couple of questions, if I can. If you see just on James, I think at the start, you said that the banks thought about doing it themselves in the U.K., so bringing in all the, I suppose, linking up all the different data sets and setting up their own processes. But you said they decided that they couldn't -- that they couldn't actually do that. Could you just explain what it is that you provide that they can't do?

I don't think they thought about it for very long after coming down here. But I think what it was, the concept of getting the industry together to work on a platform seems easy. And many are out there trying this or have tried it. They've been a whole litany of different people from the law society trying to put a few dollars into a system. And I think really what the lenders came to the conclusion is it had to be an independent body, i.e., PEXA and an industry solution. So that aside, the bidding had to have the credibility. So many markets have tried something similar, Ireland, et cetera, and it hasn't worked, but it was PEXA's credibility, PEXA's IP, the fact that actually PEXA could bring people who've done the hard yards, learn the lessons that Gary has talked about. And that credibility, coupled with the backing -- the financial backing and the 10 years of history was probably just made it a really no-brainer. So when I talk to those very lenders, they were saying that they came in within a very, very short space of time realize that it looked very different from afar. And then actually, when they got into it, they saw why it took probably 5 years to get the first lender on board. Does that answer your question?

Yes, it does. But maybe, just a related question is just around the -- I mean it seems like you're rolling out with the small banks first in the U.K. Just your evolution here in Australia, did you start with the large banks here? Or did you start with the small banks here? And it seems that your pitches that as you're testing and learning, but was that the way it transpired over here? And if it's different, why is it different?

It was slightly different. So if you remember, our history as a start-up with private equity, including money that came in from government and specifically, through equity that came out of the banks, the banks played a role in terms of that sort of consortium lender-led approach to what we did in the Australian market. Now notwithstanding that, whilst the big 4 banks may have led the charge, and I was part of that charge within a bank, the second tier and the tertiary the credit unions and customer-owned banks, they're smaller banks. They were looking at the large banks as fast followers to what the large banks were doing. So it was a strategy whereby it was across the whole financial services sector with small, medium and large, albeit that the large chipped in some cash to get this thing going. From a U.K. perspective, notwithstanding the cash injection, it's exactly the same. It's a mix of small, medium and large. And as I've said, we're trying to bring the market together. We're not trying to land on the lowest common denominator. We're trying to work with a whole bunch of lenders around trying to refine the scheme rules, get the payment scheme up and running. Going into a reference site, test and learn, test and learn, iterate as we go and then we'll go into the next group of lenders. It's a similar approach to the Australian market, but with size.

We need to be able to display to many, many parties in the U.K. of the fairness and the equity of having all the lenders able to navigate our platform. That is right at the heart of everything we do. So it's not just the domain of a few lenders. And I think that's resonating well with government, treasury peak bodies and the like. So having that whole range of lenders that PEXA opens up the market for. Okay.

And just a final question, just on the use of Thoughtworks for the IT. So -- I mean, you're not taking your IT capabilities here and deploying it over there. So just -- I mean just maybe, if you could just explain why and whether there's any thought of bringing back what's over there over the year?

Yes. So we -- again, we went through a very rigorous process to identify and land on Thoughtworks. And we thought long and hard about our incumbent suppliers also Thoughtworks in terms of why would we diversify the risk and go with 2 suppliers. We wanted to, I guess, try something a little bit different and run that alongside our existing tech providers. And we still continue to enjoy the relationships that we've always had with our suppliers over the last 10 years. In terms of building out Thoughtworks in the U.K. and what we bring back, our intention always was that we built an international platform that is a single code base with local instances that's going to be replicable and extensible across multiple jurisdictions just starting in the U.K. Now when you think about our Australian business, our platform today is a modern -- it's a modern platform. We're building a loosely coupled cloud-based system with a front and a back end stack with the whole bunch of services. Now there will be some services in that technology stack that we use in the U.K. that if we choose to recycle back into the Australian business, then we can. Now we'll do that because we have a choice to do so, not because we need to do so. So I think we now have a new CTO at PEXA, so working through what our platform strategy will look like. We think of it as one platform, albeit in 2 different jurisdictions. And over a period of time, we'll work out how do we recycle and reuse and how do we get the best for the Australian business have in line from what we've been in the U.K., and it will be a 2-way relationship.

Sorry, one last question. Just in thinking about -- I know you don't want to touch on price, but getting people on board initially. How do you think about using volume discounts to get up to scale? And then -- or is it because you're offering the banks so much in cost reductions and capital reductions, they're not required? How should we think about that?

Okay. So I'm not a fan of discounts. So we've got the first cohort of lenders that are working with us at pace. And so there may be some rebating as we craft with them some of the nuances. But I think really, we're heading towards a north star of one price for all lenders. And our first cohort are going to be our first love with maybe a little bit of rebating. And I think we are benefiting as much from working with them as customers. Because the U.K. has got a slight twist on some of the learnings from [indiscernible], but I don't think discounting is really where we're headed.

Okay. Again, I just want to say a big thank you to Scott, James and Gary, everyone who's participated virtually and physically hearing the story of PEXA Insights and PEXA U.K. A couple of things I just want to just add. One element is the Australian market is different to the U.K. market. So one aspect to Australia was Coag with [ Kevin Rudd ] started, and that took quite a bit of time in all the states have tried before, amongst others. In here, we will be up a lot faster and we'll have at the site running and where the FI is using the site. So it's quite a little bit different there. And I think it is important just to understand each market is different. There's been quite interesting learnings of Australian organizations going to other markets and maybe, not necessarily working as well as what they expected. So one of the important things for us is to have James on the ground and -- you're on the ground in the U.K. with the knowledge, knowing both the FIs and the regulatory element. And that's a very important part, having worked in the U.K. myself for 7 or 8 years. But if I just -- a couple of things I just want to add. With PEXA, we have a great exchange platform in Australia and we've done very well. We're enhancing that platform, and we'll continually enhance it, and we will be taking the learnings from international back to the Australian platform to ensure we keep driving great service for a broad customer base. What we're doing is we're extending into new services, and you heard that with Scott around insights. And again, we're very confident that we'll be able to deliver on our anticipation in terms of the growth. And we're expanding into international markets, and you heard James and Gary talking about the expansion. The other element I would add to it, we're very clear about execution. So we look at all these enhance, extend, expand and execute as what our team was saying, you can often talk about these things, but it's actually execution. We don't underestimate the execution. And one of the reasons why we don't underestimate the execution is we've got the expertise. And you've just heard from James, Scott and Gary in terms of their expertise across local, international and actually doing this. And as part of that, we've got a great PEXA team of about 400 professionals plus working in multi-markets. We've either done it before or done other things in other institutions, just generally with a strong track record. The last thing I would add, we have some key partners. Gary touched on some of those partners, Accenture, AWS and Thoughtworks. And they are part of our broad ecosystem to ensure we get sustainable success. And to wrap up, we see PEXA as an iconic Australian organization that is exporting IP and bringing wealth back to the Australian economy, but also bringing success and wealth in other economies such as the U.K. So we're cautiously confident in [ ensuring ] we deliver. And as I'm saying with some people last week, one of the things that we want to be known for is we do what we say we're going to do, but we don't underestimate it, and we're not overly hubris as well. So again, a big thank you. I hope you got a lot of value out of it, and we'll see you at the full year results, and then we'll do a deep dive later on in the year around period ventures. So thank you.