EVOLUTION OF BANKING

INTRODUCTION
Digital Wallet
and Mobile
Payments
New Banks and
Divested Banks
The next few years will see a significant number of new entrants
enter the Australian financial services industry. Some will be
well known and trusted brands who will leverage and deepen
their relationship with customers through provision of financial
services, with a particular focus on payments and mobile wallets.
Others will be new names. Some will offer new innovative
approaches to addressing customers’ needs through solutions
like crowd funding; rethinking how SMEs finance the growth in
their business. Some will exploit gaps in the market in the same
way we have seen the short term lenders growing in prominence
in recent years.
Key areas of focus for these new entrants will be:
£
Short Term
Lenders
Crowd Funding
• Which markets are the most attractive to enter, in terms of
customer segments, location and products?
Australia’s financial services sector is being reshaped. The
momentum for significant disruption, even as the banks look
forward to delivering moderate profit growth, is being fed by
a number of emerging trends. Consumers are demonstrating
increased willingness both to shop around and to purchase
financial services and products from non traditional
providers. This move away from traditional sources is due in
no small part to negative perceptions of the existing industry.
Banks and other financial institutions are already facing
the need to be bold to foster and accelerate change as they
distinguish their products and services offering in a market
characterised by promising growth. Strategic vision and
innovation must be new priorities.
• Which is the most viable approach to market entry? Should
prospective entrants look to buy an incumbent or one of the
businesses that are currently being divested, attempt to partner
with an existing firm, search for an affinity relationship, or build
an entire greenfield operation? In many cases, their decisions
will be influenced by regulatory requirements.
• What products will they offer and how will they differentiate their
offer from the competition? Will differentiation centre on price,
customer experience, customer service, or exploiting a new
technology capability?
• How will they distribute? Remotely or via face-to-face channels?
• What will their operating model look like and where will their
core competencies sit? Based on these characteristics, should
they manufacture and distribute themselves and what should
they look to outsource?
24 | The Evolution of Banking and Financial Services