Fintech moves in when banks fail their customers

In November the Monetary Authority of Singapore will hold a major fintech festival as part of the regulator’s push to promote financial services technology.
It’s all part of what broker CLSA calls the Singapore government’s $35 billion campaign to promote technology in the country.
A recent Ernst & Young report ranks Singapore fourth overall behind Britain, California and New York in terms of global fintech ecosystems.
Australia came in fifth in the survey, behind Germany but ahead of Hong Kong.
Australia ranked third behind Britain and Singapore in terms of fintech policy, including regulatory regimes and tax policy.
It ranked fifth in terms of talent and capital and seventh in demand.
Singapore has some of the same limitations of Australia in terms of having a small market and reluctant small business users but both sets of regulators received encouraging remarks.
At least they were trying even if they were not completely on the same page yet, was the conclusion on Australian regulators.
The report, it should be noted, was commissioned by the British Treasury in response to its government’s declaration that it wanted Britain to be “the global capital of fintech”.
Importantly, the report noted fintech “tends to have a laser-like focus on specific customer propositions … they tend to be the ones poorly served by traditional companies”.
In other words, the technology companies focus on serving customers and generally do so where the mainstream banks are letting them down.
Maybe the Australian banking oligopoly is serving customers well or blocking innovation because Australia did comparatively worse in the survey on the issue of demand from both consumers and companies alike.
Australian Securities & Investments Commission boss Greg Medcraft is a big fintech proponent and it is no accident that he has an MAS staffer working on secondment with ASIC on the issue as part of the corporate cop’s international exchange program.
He has also signed a mutual co-operation agreement with the MAS on fintech so the two regulators can share ideas and experiences in promoting the use of technology.
Part of the game is to ensure regulation doesn’t get in the way of technology, as shown by ASIC’s recent advisory on robo financial advice.
The advisory made sure the market knew regulation was technology neutral so basically the same rules apply no matter what the delivery system is.
This means, by way of example, if a computer spits out four choices of possible investment strategy and the client chooses one of the four, then no detailed product advice is needed, but if the robo adviser suggests option B, then a full advisory statement is necessary.
The EY report says “there needs to be a bottom-up push for technology talent and science, technology, engineering and mathematics if the government is going to keep the talent in Australia”.
The banks in Australia have moved wholesale into technology development, so the technology chief is now the big selling point for the bank in terms of external promotion by the bank.
The mantra is all about delivering what customers want in terms of easier to use banking products and quicker access to services.
This explains why ANZ will tell anyone who will listen how many (confidential) new customers it is getting because it is the lonely bank in Australia offering Apple Pay to allow its customers to use their Apple device as a bank card.
The rest of the oligopoly is trying to get clearance to negotiate jointly for better terms from Apple.