Turnbull's banking royal commission welcomed by fintech

Malcolm Turnbull has announced plans to establish a royal commission into the banking sector, and one fintech is hopeful it will bring more competition and trust to financial services in Australia.

The announcement comes following a letter from ANZ, Commonwealth Bank, Westpac and NAB to the Treasurer asking for an inquiry to restore public faith.

Alternative finance and peer-to-peer lender MoneyPlace’s CEO Stuart Stoyan told Canstar a banking royal commission “has been a long time coming”.

“It’s important to re-establish trust with banks and financial services more generally,” he said.

“I’m hopeful it will allow us to review policies that enable fintech to provide great products and services to all Australians – open banking in particular.

“Fintechs are providing products and services that are better than what’s currently being offered.“We are seeing that Australian consumers’ trust in fintech is actually on the rise while it’s trust in the major banks is on the demise.

“This is a chance for the government to embrace these changes to ensure we get world-class products and services.”

The EY FinTech Australia Census 2017 survey recently revealed Australia has a comparatively high, and rising, fintech adoption rate of 37% – this has tripled over the past two years (from 13% adoption in 2015).

Mr Stoyan expects with the increasing adoption rate and a banking royal commission, the government will look to alternative lenders more and more.

“The government will look to MoneyPlace and companies like us and say, ‘why is it that MoneyPlace can provide better interest rates but banks can’t’,” he said.

Another Australian fintech, Acorns Grow Australia, has also welcomed the banking royal commission.

“We believe an inquiry into the banking industry may help the government achieve its goal of encouraging financial innovation in Australia and the associated positive result for all consumers,” said Acorns Managing Director George Lucas.

“We hope this inquiry will aid in levelling the playing field in financial services.

“To have a strong banking industry doesn’t mean that the banks need to dominate in every financial service offered to the Australian public.”

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Source: Turnbull’s banking royal commission welcomed by fintech | Canstar