Australian banks ahead of global financial institutions on fintech engagement: report

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People are seen in the Level39 FinTech hub based in the One Canada Square tower of the Canary Wharf district of London, Britain, August 5, 2016. Reuters/Jemima Kelly/File Photo

Australian banks lead global financial institutions when it comes to fintech engagement, collaboration and innovation. According to a recent report, the majority or 67 percent of Australian respondents, including four of Australia's top five banks, had a clear strategy in place to deal with fintech.

For Ian Pollari, KPMG head of banking and global co-lead for fintech, the statistics were reflective of the country’s innovative approach to tech. “Taken as a whole, the Australian financial services market has been quicker to adapt to disruption and technology trends,” he said.

KPMG’s new global report involved 168 financial institutions from 36 countries. It found that only 47 percent had a clear strategy in place.

The report titled “Forging the future: how financial institutions are embracing fintech to evolve and grow” surveyed 160 financial institutions. Among them are the biggest banks in Australia.

“Increasingly, [Australia] is taking a global view as seen in announcements such as Reinventure’s [Westpac] investment in US-headquartered Coinbase, and CBA’s [Commonwealth Bank’s] acquisition of South Africa’s TYME,” Pollari said. He added that the KPMG report dispelled the myth that Australia was a slow adopter, and that the nation’s financial services giants were not open to engaging with the fintech system.

Pollari warned that institutions failing to recognise or respond to the structural shifts caused to the sector by technology would deal with serious challenges. It appears that the Australian financial services market is safe. Pollari said Australian respondents had a dedicated fintech team.

There seemed to be some hesitation from banks to embrace fintech in the past. But recent leaps forward have been seen.

For instance, Macquarie Bank has decided to open its open banking platform. It allows third-party fintechs to connect and customers to share their data in a safe manner. CommBank, on the other hand, has made partnerships with fintech players while Westpac has made investments through its Reinventure fund as well as on its own.

Jonathan Davey, executive GM Digital and Innovation at NAB, recognised the critical importance of shifting focus from products and service to gain a deeper understanding of the customer and how to solve concerns, Finder reports. This can be achieved through the customers’ preferred channel.

Davey said the bank has already established strong partnerships, including those with REA and Xero. Looking at the future, the report states fintech innovation remains a race, and there are no clear winners yet.

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