One-stop shop banking model unsustainable: Wisr
Smaller banks outside the big four will have to rethink how they operate with the traditional model of being a hub for all banking and financial services no longer being profitable, Wisr chief Anthony Nantes has said.
With there now being multiple players in the landscape, and data being more readily available for customers considering products that suit their circumstances, banks may have to consider sharing customers with their competitors or forming partnerships.
Speaking on a panel at the Ashurst Fintech Summit in Sydney (last Thursday), Mr Nantes predicted companies will adapt their models as customers seek products across different providers.
“The idea of a banking relationship that holds everything is dying. I think that’s clear for everyone. What we will see is the banks allowing big changes in their business models,” he said.
“Particularly those challenger banks, the banks that aren’t number one, will be forced to have to think about how they partner differently, how they service other items differently, in an environment where their return on equity is halved over a period of time.
“And those profits they’re making, there’s certainly an argument that that’s the model of an all-in-one shop has been sustainable because of [those funds from deposits and other services], that pays for all the retail banks, pays for your branches, pays for everything else. If you take away a lot of that, then a single place to have all your banking maybe isn’t a sustainable business model anymore.”
Pointing to mortgage rates, he said despite smaller banks having lower interest rates, the big four were still dominating the market.
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