Traditional banks will not be toppled by disruption from fintech players, an executive director of Macquarie Bank has said.
Speaking at the AltFi Australasian Summit held in Sydney this week, Macquarie Bank executive director, head of corporate development & strategy, Ben Perham, said major tech companies are certainly driving innovation, but they will never compete as full financial services businesses.
“The ambitions of Apple and Google and so forth are hard to predict but certainly when we talk to them they are not interested in being a regulated financial services business,” Perham said.
Perham admits they are “incredibly active” in the payments space in terms of disruption, but it is only at the “level of customer interface rather than at the level of the rails that actually run the payments system”.
He said he would be “very, very surprised” if the biggest banks in Australia couldn’t maintain that status in the future.
“I think the focus will be a lot on partnering and ways that loans can be originated in more efficient ways but I would be very, very surprised if the largest five banks in Australia weren’t still the largest five banks in Australia in twenty years’ time.”
However, Martin Barrett, managing director of Auswide Bank, was not so steadfast about the future. Also speaking on the panel at the AltFi Australasian Summit, he said banks will need to innovate if they don’t want to perish.
“I think the biggest risk for the banks generally is confusing apathy or loyalty. If we are lousy at the customer experience and we treat our customers with a level of content, if we are not focusing our efforts in terms of our customer experience then ultimately we will perish. It is inevitable.
“But if we get those pieces right and we have a focus on a meaningful relationship with those particular customers and if we can match what we lack with what’s on offer in the marketplace from new entrepreneurs then I see no reason why we wouldn’t be around for some time.”
