Speaking on a panel at the Intersekt fintech festival in Melbourne on Friday, Mr Smith – who is now chairman of tech incubator York Butter Factory – said banks are willing and able to shift their modus operandi.
“The product of a bank is fundamentally a bill of exchange and that hasn’t changed since the 1400s,” Mr Smith said. “But the delivery of customer service has changed so much. Banks are willing to change.”
However, while there is an appetite among institutional leaders to adapt to shifting technological trends and consumer demand, Mr Smith conceded that nimble start-ups have the edge when it comes to business agility, particularly in the financial services realm.
“The advantage for the fintechs is that the pace of change is unprecedented and that is an advantage for them,” Mr Smith said.
“When you look at fintech and the real future and how it can make a difference, the key is to find a cheaper process than is presently being used.”
Banks struggle with legacy technology that are built around “accounting systems, not customers”, the former big bank boss said.
“The key is anticipating consumer behaviour,” he said. “What happens now is completely reactive.”
Mr Smith also advised fintech start-ups to seek relationships with “visionaries” within senior leadership of the banks, rather than middle management or other non-decision-makers.
“If you’re in the machine, you’ll be in the machine forever,” he said.
