At least one of the big four Australian banks is likely to "disappear" within two decades in the face of an "onslaught" from the fintech sector, says Tyro Payments' chief executive Jost Stollmann.
Speaking on a panel at the 'Fintech CEOs on the Future of Finance' seminar, hosted by UNSW in Sydney last week, Tyro Payments CEO Jost Stollmann said the bank of the future will be a technology company with a banking licence.
Tyro describes the business model as a ‘Nextgen Bank', Mr Stollmann said.
“According to a recent Frost & Sullivan study, Fintech in Australia – Trends, Forecasts and Analysis 2015 – 2020, the Australian fintech sector is set to take $10 billion in aggregated revenues away from the big Australian banks and contribute $3 billion of new revenue to the Australian financial services sector from 2015 to 2020,” Mr Stollmann said.
“This train is coming fast. Can an old-style bank respond and stay competitive? Maybe. Can all of them? Probably not,” he said.
“Just think: one of the big four banks could disappear in the next 20 years. The only question is, which one will it be? Unless the banks can unbundle their products, overcome their legacy infrastructure and compete with low-cost ‘provider agnostic’ digital platforms, they might well cease to exist.”
Mr Stollmann said Australia cannot afford to be complacent, highlighting that an increasing number of the country’s best and brightest minds are leaving the big banks in order to start their own businesses and reinvent banking.
“The government, regulators, and the wider community should encourage and enable these entrepreneurs and their efforts. We are well-placed as a country to lead ‘Nextgen’ banking and it will take courage and commitment to get us there,” he said.
Tyro is an Australian eftpos provider which obtained a banking licence in August 2015.
In December, the group announced that it had raised $100 million from Tiger Global Management in New York, TDM Asset Management in Sydney and Australian technology entrepreneur Mike Cannon-Brookes to fund the next stage of its ambitious growth strategy – which is lending.
Tyro will look to compete with the big four banks in the SME lending space and is eager to leverage data from more than 14,000 businesses in Australia, for which it processes over $8 billion annually in transactions through its internally developed cloud-based platform.
The ifa Excellence Awards are back in 2021 and nominations are now open! This prestigious accolade recognises exceptional professionals within the financial advice industry, shining a light on the outstanding achievements from the nation's best and brightest. If this sounds like you or someone you know, then nominate today for the ifa Excellence Awards 2021!
Digital record-keeping platform Vestwell has teamed with robo-advisory tech provider Bambu in an effort to “provide customers with an even...