Banking is in the midst of a massive shakeup widely believed to be a result of technological innovation. But, Wayne Byers, chairman of Australia’s banking regulator (APRA) has turned the argument on its head saying it’s not technology but the lack of loyalty of the users of that technology – Millenials – which is the real disruptive forces.
“Technology is not necessarily the big issue; perhaps the most disruptive thing is brand,” Fairfax quoted Byers today.
Byers’ comments, at the Boao Forum for Asia in Sydney yesterday, highlighted that younger Australians are more likely to place trust in the big brands they know and use than in banks.
We have a new generation of people who are not necessarily wedded to the old brands. Financial institutions were always built on trust, and those big brands generated a lot of trust. Increasingly, we have a new generation of consumer who looks at a brand in a different way, and trust is placed in many new brands that have become very big, very quickly.
His comments also underlie why Australia’s big banks are spending so much time and money working on websites, wealth management tools, NetBank service and apps.
Yesterday, BI’s Alex Heber reported that the Commonwealth Bank has a whopping 75 UX specialists working on its tech products.
CommBank head of innovation Tiziana Bianco told Business Insider the team, which is in Sydney, works across the whole bank and focuses on designing a seamless user response.
That, according to Byers, is the key to banks remaining relevant in the face of new technology such as ApplePay because:
“We have retail customers who have an increasingly common expectation that, short of withdrawing dollar notes, you can do your banking and make your payments on whatever mobile device you happen to have in your pocket.”
Byers also reflected what is likely to be a banking technology arms race to satisfy new customer demands and battle new players.
“As much there is a fear of new entrants coming in and encroaching on the traditional turf, I think as much, if not more, of that competitive response has simply come from the knowledge that existing competitors are investing heavily and [finding] more efficient ways to do business, so it is not an option to stand still and defend the status quo,” he said.
You can read more here.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.