Wary banks to enter fintech waters

While larger financial institutions have traditionally stayed out of the fintech space, this could soon change, according to some of Australia’s leading experts.

“To date I’ve actually taken the view that I don’t think the banks have really played much in this space because it’s disruptive and it’s easier for them to not necessarily add fuel to the fire or to accelerate that disruption,” said Anthony Millet, CEO of BRICKX, in a panel discussion at the Millennial 20/20 conference in Sydney (14 November).

This is now changing with new legislation being introduced in Australia that makes it easier for start-ups to enter the market, he said.

“I think we’re going to see a lot of banks participating in this space which is going to be interesting and going to make it more expensive for us to market.”

An example of the banks failing to meet the needs of a key segment of the market came in a later panel at the conference where Beau Bertoli, joint CEO of Prospa discussed how small and medium enterprises have been left behind.

“The banking system, even to this day, has not created solutions for small businesses,” Bertoli said.

Prospa took the onerous experience of having to fill out a 25-page application form, having to ask for three years of financials from an accountant, or waiting up to eight weeks for a loan approval and created their own business model to improve on this.

The company also enhanced other aspects of bank-sourced loans including better risk management around credit which has brought in $500m of SME lending to date, he said.

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Source: Wary banks to enter fintech waters – AustralianBroker