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NEWS Aussie Fis face FinTech onslaught
stage of the business cycle and already the FinTech startup space has grown rapidly in Australia. Frost & Sullivan believes that the inertia and stability of the Big Four banks is more a weakness than strength, and will be increasingly exposed as such without a clear strategy to decentralise the existing suite of banking products.”
hard by FinTech startups, according to Frost & Sullivan. It has released a study forecasting that the Australian FinTech market will reach over A$4 billion in revenues by 2020, including A$1 billion in completely new added value to the nation’s economy. FinTechs are set to take A$10 billion in aggregated revenues away from the major players and contribute A$3 billion of new revenue to the Australian FS sector from 2015 to 2020.
T
Audrey William, Head of Research, ICT Practice, Frost & Sullivan Australia & New Zealand says: “This disruption should be of serious concern to the Australian financial services sector. While FinTech will not end traditional financial services, Australian FinTech is in the development
he Big Four Australian banks are set to be hit
Out of the Big Four, Westpac is the most engaged with new technologies to combat disruption. It opened an innovation lab in September 2014 and has already invested $A50 million in companies throughout the FinTech sector, with blockchain trials and mobile payments through its partnership with Android Pay to begin in 2016. The Commonwealth Bank of Australia (CBA) comes in second. As the bank with the highest market capitalisation, it has the most to lose from disruptive new entrants. It is trialling blockchain technology with its subsidiaries and has set up two Innovation Labs designed to research Artificial Intelligence (AI) and Machine Learning Systems with a third lab planned in London in 2016.
As for NAB and ANZ, whilst they have developed strong engagement strategies, they have been late in committing resources compared to WBC and CBA. Future growth will depend on how much the government chooses to favour the Big Four and keep the financial sector regulated against market volatility.
Scott Thompson
Atom gives a glimpse of the future
challenger bank Atom, has given an update on progress made and what lies ahead. Last year, Spain’s BBVA acquired an almost 30% stake in Atom, which was founded by Mullen, former CEO of first direct and Anthony Thomson, who created Metro Bank. In a blog post, the former says: “Way back when we started this journey, we agreed that
M ark Mullen, CEO of UK digital-only
Atom would always put quality first. It takes a long time to build and test banking systems. It takes time to find good people. It takes time to develop sensible plans. And it’s expensive, albeit building Atom has cost a fraction of what a traditional bank might spend in a year on lawyers to keep them out of trouble. But in the end, we really do believe that quality counts.”
www.ibsintelligence.com © IBS Intelligence 2016
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