Small and mighty: Meet the challenger banks nipping at the heels of the big four
A slew of challenger banks are poised to burst onto the Australian finance scene, in a bid to take on the big four, and change the way that Aussies think about banking. Typically offering cloud-based banking services without a bricks-and-mortar branch in sight, these so-called ‘neobanks’ say they will provide a more personal banking service, designed to be more in line with what modern bank customers want, whether that’s near real-time updates on spending and saving, or personalised lending for small business customers. Who are the challengers? They’re all still awaiting banking licences, but there are four major challenger banks coming out of Australia, at varying stages of readiness. They […]
Fintech’s double-edged sword
Ultra-low interest rates and fintech were two of the major threats to the stability of the financial system identified by the global regulator in its recent annual economic report. “Sustainable profitability is especially important at the current juncture: banks have been facing the dual challenge of persistently and unusually low interest rates eating away at their net interest margins, and growing competition from new technology-savvy players – big tech and fintech,” the Bank for Financial Settlements reported. “Once [fintechs] do have the scale to disrupt they will be regulated as if they were part of the established order.” According to Fabio Panetta, the deputy governor of the Bank of Italy, […]
Square and BOQ team up to help more Australian small businesses get started
Global payments company Square, founded and run by Twitter CEO Jack Dorsey, has announced it is teaming up with Bank of Queensland (BOQ) for a first-of-a-kind partnership that will give more Australian small businesses a simple way to access great banking services and more flexible payment options. From today, new BOQ small business customers signing up for business banking services will also receive a free Square Reader for contactless and chip, and fee-free processing for their first $1,000 of sales. The partnership is designed as a ‘one-stop-shop’ solution enabling time-poor business owners to walk into any of BOQ’s 180 national branches, and walk out ready to start working instantly. “We’re […]
$2bn of broker commissions in fintech’s crosshairs
An Australian fintech has set its sights on disrupting the dominance of the mortgage broking industry by appealing to the banks who it claims are keen to reduce the $2 billion they spend on broker commissions. Adelaide-based online home loan platform Joust has distanced itself from its competitors in the fintech space, which has seen a flurry of mortgage disruptors in recent years. “Joust is not a comparison site with a myriad of static rates. It is also not an online broker or aggregator. We are a revolutionary marketplace model for home loan customers and lenders,” Joust co-founder and CEO Mark Bevan said. Joust is leveraging the negative press that […]
Bank of Queensland bans using home equity loans for crypto
Lenders are banning property buyers from using home equity to buy cryptocurrencies because of regulatory fears and increased risk from volatile trading conditions. Bank of Queensland is the latest to ban any drawdown or lines of credit from loans to be used for leveraged purchases, trading or other use of the largely unregulated global digital currency. Other lenders are discouraging borrowers and mortgage brokers, who act as intermediaries between lenders and borrowers, from using real estate to fund high-risk investments. Leveraged currency plays can magnify gains from a successful investment decision but worsen losses. Lenders are asking questions and monitoring borrowers’ accounts to alert them to crypto-trades, purchases, or offshore […]
Forget Hayne, here’s four ways technology will remake financial advice
Technology’s waves have swamped plenty of other industries, so it’s hardly a surprise they are washing over the provision of financial advice. So much so, there’s talk of yet another “-tech”: as in, AdviceTech. So what’s accelerating the pace of digitisation of financial advice? Four key themes come to mind: First, providers realise the current advice offering does not resonate with customers. It’s a poor “experience”. Stats suggest only one in five Australians gets financial advice. Second, the royal commission into financial services has made it abundantly clear the dominant advice model has too many conflicts of interest. Regardless of whether the inquiry separates product manufacture from providing advice, it […]
Credit cards on the decline as Visa says we have passed ‘peak plastic’
Australia has reached “peak plastic” and credit card transactions will now start to decline, as people increasingly adopt mobile and wearable payment technologies, according to the new country manager of Visa. In his first interview since becoming the head of Australia, New Zealand and the South Pacific at Visa in January, former local head of Citibank’s consumer banking operations Julian Potter told The Australian Financial Review the tipping point for change in consumer payments preferences would come when things like Myki or Opal cards could be stored on your phone in a digital wallet. “I use my phone and it just took a few goes and then the habit set […]
Should The Reserve Bank of Australia Issue a Digital Currency?
During a recent Australian Business Economists forum, the Head of Payments Policy Department for the Reserve Bank of Australia, Tony Richards, had a lot to share on cryptocurrencies and distributed ledger technology in the Reserve Bank’s perspective. Of particular interest was whether the bank might consider issuing a digital version of the Australian Dollar. According to Richards, Bitcoin and many other cryptocurrencies were largely impressive and admirable, but flaws in their design coupled with limited usage within Australia made them unnecessary and hence there was no need for the bank to issue a new digital version of the Australian Dollar. The Bank’s Approach To Cryptocurrencies Australia can boast of having […]
