Douglas Adams,
author of the ‘Hitchhiker’s Guide to the Galaxy’, accurately sums up
how well Australian businesses are incorporating new technology with
his eternal quote:
“I've come up with a set of rules that describe our reactions to
technologies:
-
Anything that is in the world when you’re born is normal and
ordinary and is just a natural part of the way the world works.
-
Anything that's invented between when you’re fifteen and
thirty-five is new and exciting and revolutionary and you can probably
get a career in it.
-
Anything invented after you're thirty-five is against the natural
order of things.”
Developing and evolving in tandem with a rapidly changing financial
landscape is front of mind for most strategic decision makers. Yet
rarely will you find an individual or an organisation that can
withstand too much change at once.
It takes a significant pre-commitment of time and resources to
‘transition’ successfully. ‘Change’ is a relative concept and requires
a great degree of focus given the requirement for it to be implemented
in tandem with current processes and operations, effectively ‘doubling
up’ the normal day-to-day running of a business.
The productivity and cost savings offered by ‘P2P’ (peer-to-peer
lending) and contactless payments solutions are undeniably clear,
however the conversion to these types of doing business will vary by
bank and provider.
Across the US and EU it is estimated close to US$6.5 billion in loans are
attributed to P2P lending sources and growing fast. The role of the
bank in providing and servicing loan arrangements is being questioned
by businesses and customers, posing as a sizeable threat to continued
growth and stability.
Australian banks’ sustained cost cutting and technology investment
focus is deemed to be barely adequate in the face of rising
competition from both home and abroad as new players enter the fray at
an increasing pace.
Banks are faced with the challenge of quickly adapting to changes in
the digital space with the threat of more than just ROE at stake. |
The CIO of the Reserve Bank of Australia, Sarv Girn, recently warned that
digital disruption has transformed the corporate world and firms would
need to adjust to survive.
“Bookstores, the
music industry and newspapers – all of which were the giants of their
time – now find themselves trying to avoid extinction.”
“Building digital disruption plans into the corporate conversation and
embedding it into the goals and cultural DNA of your firm is
fundamental.”
The Big Four are acutely aware of their susceptibility to ‘technology
disruptors’ however the appetite for new technology appears to vary
significantly by business size.
When 447 of Australia’s top 500 enterprises by revenue were
surveyed as part of East & Partners Institutional Transaction Banking
program on what their main reason for engagement with their primary
bank was, 62.4 percent singled out technology innovation as their
primary motivating factor.
Australia’s largest businesses by turnover ranked technology
innovation ahead of improving their working capital position (53.7
percent) and existing technology problems (30.4 percent).
Payments clearly offer the most opportunity for new entrants. Digital
payments presents as an area where the Big Four are seemingly not
consolidating market share with enough clout, missing an opportunity
to stave off threats from disruptors such as PayPal and Ezidebt to
name a few..
This particularly rings true with the abandonment of the MAMBO
collaboration for example, signifying a move away from collaborative
initiatives to find viable online payment alternatives to credit
cards.
Banks and ‘disrupters’ are grappling with the fine balance between
keeping pace with rapid improvements in technology and avoiding change
for ‘change’s sake’.
In terms of the successful proliferation of new business banking
technology – how much change can business owners and CFO’s absorb
before they throw up their hands in dismay and declare “it’s all too
hard?”
Computer scientist Bran Ferren aptly defines technology as ‘stuff that
doesn’t work yet’. This reflects a widely felt frustration held by
business owners altering current process and adapting to new
interfaces. |
