Discussing technology & innovation in Australia and around the globe.
Innovation Bay’s Banking Disruption Breakfast on 15 October 20.10.2014

Last Wednesday, over 110 people joined Innovation Bay at Gilbert + Tobin in Sydney, to listen to a panel of financial industry experts speaking about how disruptive technologies might shape the future of banking.

The panel was hosted by respected journalist Bronwen Clune; and the expert panel was comprised of Westpac’s Head of Digital Strategy Angelo Demasi, Chris Brycki, Founder and CEO from Stockspot.com.au, MOGO+ CEO Andrew Clouston, and Society One CEO Matt Symons. We were anticipating an insightful discussion, and we weren’t disappointed.

Westpac’s Angelo Demasi opened by speaking about the challenges currently facing Westpac, which he quipped was itself a “200-year-old start-up”. Demasi acknowledged that the customer-technology relationship was a keen focus of Westpac: “We are tilting our major investment towards customer experience. We always approach every problem we face from a customer point of view. We are becoming more and more agile, trying to crack old problems in new ways.”

Traditional lending products, financial advice and business finance, were all areas that the panel agreed could benefit from a new generation of tech solutions. It was clear that customer experience has traditionally been poor in these areas, and it is now becoming the focus of both traditional banks and new tech start-ups attracted to the opportunities this space offers.

Society One CEO, Matt Symons, said it was natural for the architects of disruptive technologies to be attracted to the banking and financial industry: “disruption has typically occurred in industries where there are large profit pools, but low customer experience,” he explained.

Chris Brycki, whose online financial advisory service, StockSpot.com.au, is already employing technology to offer its customers a new financial investment solution, agreed with Symons that big banks were providing a great opportunity for tech start-ups to forge their way into the market. “Generally banks aren’t very good at the customer journey and customer experience. Businesses that are good at customer experience will rise to the top.” And Demasi conceded that the future of financial advice would be automated: “technology is reducing the barrier for the customer to invest.”

MOGO+ CEO, Andrew Clouston, explained that despite the attractiveness of the market, breaking into it wasn’t easy: “Credit processes are becoming increasingly regulated, making innovation harder in these spaces,” he said.

This echoed Brycki’s experience: “It took us a year to get through the regulatory hurdles to set up our business. I don’t really see that changing in Australia. I think the regulators have done a great job over the last five to ten years, so I don’t think they’re going to change anything. While it would be great for competition, I can’t see it happening.”

Despite their differing perspectives, it seems the panel generally agreed that Australia could be a leader in this space, but it would require a lot more support from both industry and government. As MOGO+ CEO Andrew Clouston emphasized, the “role of government [investment] is really important.”

It is also important that Australia’s tech start-ups are given the legislative support by government, so they too can attract the talent needed to create these technologies, during their initial months or years. The panel welcomed the Government’s share scheme announcement. “One of the biggest issues is the opportunity cost for people leaving their jobs. Getting good talent to leave without the equity upside is very difficult,” explained Chris Brycki.

“These things [share scheme] are bringing Australia to parity with the global scene we are competing with,” agreed Symons.

The panel discussion showed a similar perspective on many of the issues facing the industry, which echoed the general consensus that the future of banking needn’t be big banks versus tech start-ups, but rather that a collaborative approach could be possible.

The start-ups’ ability to focus on niche specialisations could add to the banks’ ability to improve customer experience: “The opportunity for disruption doesn’t always happen in the big areas of the market, it can be in the niche areas of the market. We’re focused on niche propositions that have the opportunity for not just disruption but for collaboration with the big banks. We can contemplate models where both can coexist,” Matt Symons remarked.

We’d like to thank our panelists for their frank and insightful contributions, as well as our guests for their participation in the Q&A. If you were unable to attend in person, or did not manage to follow our webcast live, we invite you to view the discussion in full at our Baywatch Blog: http://www.innovationbay.com/baywatch/2014/10/16/banking-disruption-panel-webcast-recording-now-available

    Gilbert + Tobin
    Macquarie Group
    Shadforth Financial Group
    RSM Australia
    Radium Capital
    Mills Oakley Lawyers
    KPMG High Growth Ventures
    Silicon Valley Bank
    KPMG High Growth Ventures
    Gilbert + Tobin Lawyers
    Adelaide City Council
    Cowell Clarke Lawyers
    Government of South Australia
    KPMG High Growth Ventures
    Silicon Valley Bank