Aus banks failure to meet tech challenge could weigh on economy
(22 October 2018 – Australia) Westpac Group Chief Information Officer (CIO) Dave Curran has warned that the Australian economy could be beset by serious ingrained structural issues if regulators, government policy, banks and technology developers do not cooperate more closely to meet market changes brought about by digital advances.
Mr Curran believes there are a multitude of challenges ahead for regulators, banks, government and consumers as Open Banking becomes more mainstream in the Australian market. Dave Curran has decided to retire from Westpac at the end of January 2019. Mr Curran has led the Group’s technology function since 2014 and has been instrumental in resetting and reshaping Westpac’s digital transformation, particularly within cloud computing. Following a global search, Craig Bright has been appointed as CIO.
Freeing up customer data to new Fintech players and concerning tech skills shortages are the most pressing issues according to Mr Curran, with Australia set to be surpassed by other countries without more investment and priority placed on meeting the challenge. Open banking is at the forefront of the agenda, which is the first stage of opening up access to consumer data held by banks. By 1 July 2019 banks will be required to make data available on merchant payments, transaction banking and application programming interfaces (APIs) for Fintech start-ups to develop new products and services. Mr Curran said Westpac was supportive of open banking and wanted to make it work, but warned there was still a significant amount of work that needed to be done, which was hampered by regulatory uncertainty and a lack of understanding among the broader population of the privacy impacts.
The International Monetary Fund (IMF) and the World Bank have also weighed in on sovereign considerations and global implications of blockchain and other financial services technologies. The Bali Fintech Agenda, released at the conclusion of their annual meeting, distils the issues and concerns around disruptive technologies like distributed ledgers and smart contracts. The 12-point agenda intends to provide guidance to countries in their assessments of policy options around specific circumstances and priorities. In the US, banks, Fintechs, and data aggregators have formed a network that will create a standard for sharing customer data in preparation for open banking. Wells Fargo, JPMorgan, BAML, U.S. Bank and PNC Bank and others are part of the “Financial Data Exchange”.
In his view technical, regulatory and service standards were not yet clear and balanced and said if regulators didn't co-ordinate fully or consult with affected parties it would lead to significant duplication, poor integration and greater complexity across organisations. Mr Curran has previously spoken out about the shortage of staff with relevant technology skills, with the onus on both business and the education system to change to match the changing workforce requirements. Another key factor is risk management and digital security. Westpac deals with over a hundred cases of identity theft every month and victims are not prepared for the extent of the mental and financial trauma. Maintaining security standards in the open era remains a significant challenge.
"In my near five years at Westpac we've spent over A$10 billion on technology. We are part of a large ecosystem consisting of many players including policy makers, regulators, educators, big tech companies and start-ups – and that's before we even talk about our staff and our customers. The problem is that the players in this ecosystem are often out of step with each other. We are like a bunch of diverse people at a dance, but each dancer has a different tune in their head and moves to their own rhythm. We spend a lot of time looking at our feet, rather than at the dynamics of the dance floor. As a result, heads bump and toes get stepped on" said Mr Curran.
"Big tech companies sometimes complain that we call them suppliers rather than partners, but we do this because it's true. We are treated as customers not true partners and long-time collaborators. I can turn up after a weekend and discover that 30 staff, who were working with my team on Friday aren't there on a Monday, because of a decision we didn't know about made in some offshore intergalactic HQ. I'd like to see Big Tech genuinely transform and become less of a performer and more of the partner they claim they want to be; responding to our aspirations, becoming more flexible, and aligning more closely to our strategic goals" he added.
Subscribe