AT Kearney Sydney-based partner Nigel Andrade said the banking sector has performed remarkably well in the past decade but looking ahead the economic environment is only going to become more challenging.
“It is in this context that Australian banks have the chance to help our economy shine and be seen as the key factor tilting our odds of success in favour of a healthy, vibrant economy despite whatever macro trends evolve in the coming years,” said Mr Andrade.
The AT Kearney Banking on our Future paper outlines five mega-trends likely to shape the economy, which can potentially be threats or opportunities.
AT Kearney principal Robert Bustos-McNeil said there are four areas the banking sector needs to address by developing initiatives in order to contribute to future economic growth.
The white paper argued there needs to be an “unlocking of capital to fuel the future economy”.
It explained that economic growth requires access to capital and that Australia is experiencing increasing demand for such capital.
AT Kearney said while the nation may be building sources of capital such as real estate, cash and investments like superannuation, these are not necessarily available to fund business and economic growth.
The paper said banks can play a “critical facilitation role, bringing capital supply and demand together – creating markets which enable greater capital mobility and liquidity”.
“Banks may have to consider the role they can play in stimulating the development of the domestic bond market, developing new products to attract and unlock funds from less-productive assets such as property, and play a pioneering role in facilitating new funding markets,” said the report.
AT Kearney also believes there is an opportunity for banks to power potentially crucial growth sectors, including small and medium businesses, agriculture, infrastructure and the environment beyond traditional secured lending.
The paper said that banks are also in a superior position to offer insight to Australian businesses about the risks, rewards and realities of Asian market opportunities.
The other area where AT Kearney believes banks have a significant role to play is in leading the charge into the digital economy.
“Large bank technology spends have the potential to create such centres of innovation in digital ecosystems as well as to show clients the commercial value of technology innovation and investment,” said the paper.
