NAB warns on Facebook, Apple banking threat

Technology giants with investment budgets that dwarf those of Australia’s banks are expanding into financial services, and likely to represent a growing competitive threat to the industry, National Australia Bank warns.

NAB’s chief operating officer, Antony Cahill, on Thursday highlighted the future wave of competition banks may face from the technology sector, as he appeared before the Productivity Commission’s inquiry into competition in finance.

Mr Cahill said that on top of the “truly intense” competition banks currently faced, lenders were “acutely aware” of the growth and emergence of new rivals. These potential rivals included financial technology or “fintech” firms, and the likes of Apple and Facebook.

He cited KPMG figures showing a five-fold increase in the number of Australian fintech firms in recent years, from less than 100 in 2014, to 579 last year.

“While we do look for opportunities to work with start-ups, fintechs and emerging technologies, where there are opportunities to create new experiences for customers, we are acutely aware the majority of these new players will likely act as direct competitors,” Mr Cahill said.

“We are also seeing the global tech giants, such as Apple and Facebook, continuing to move into financial services, particularly within the payments environment through services such as Apple Cash and Facebook Messenger.”

“These tech giants are truly global businesses; they are many times larger than any Australian bank and have multibillion-dollar budgets which dwarf the investment capacity of any Australian company.”

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Source: NAB warns on Facebook, Apple banking threat – The Sydney Morning Herald