Fintech threatens credit unions: Moody’s
Moody’s says new digital banks such as Volt, which received an Australian-first banking licence this week, will threaten credit unions and building societies.
Credit unions and building societies’ lack of tech leadership means they are under threat from a new wave of digital banks, according to ratings agency Moody’s.
Volt, co-founded by a former chief executive of mortgages at UK giant Barclays, this week became the first fintech granted a banking licence – allowing it to raise deposits up to a maximum $2 million.
Moody’s Investors Service vice president Frank Mirenzi on Tuesday said the big four banks – ANZ, Commonwealth Bank, National Australia Bank and Westpac – were already well placed to compete with the new players, given their sizeable budgets for technological innovation and digital transformation.
But smaller banks, building societies and credit unions will be vulnerable to competition, he said, “given their lack of technological leadership and lower levels of profitability and economies of scale, which can significantly constrain budgets for technological change”.
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