I have a different view on this. Firstly, I don't think any bank in the world can call itself 'fully digitised'. There are plenty of unsolved challenges such as full digital on-boarding, 100 per cent availability of critical services, fully integrated omni-channel capabilities and end-point security.
"One of the challenges [banks] are working through is to understand how we can truly integrate with start-ups and other smaller organisations."
Patrick Maes, Chief Technology Officer, ANZ
These are challenges which cannot be solved by one bank alone and can often only be addressed by the industry as a whole.
Banks need to build strong relationships with all parties in their ecosystem – existing vendors and partners, fintech start-ups and the bright minds in universities. The numbers of challenges to be addressed are numerous, there is no need for rivalry because the financial services pie is much bigger than start-ups often realise.
The solutions will inevitably originate along different and innovative paths and none should be discounted, meaning there is a lot of potential and value in connecting across the sector.
I would compare it with the gold rush in California and Victoria only this time it is happening in the digital space. At ANZ, we are in the varying stages of building these relationships.
- We are undertaking innovative projects with many universities across Asia Pacific. We have explored platforms for co-created apps with internal and external parties, advanced data visualisation techniques, usage of gamification in financial advice, advanced analytics, etc.
- We are investing in fintech environments such as Stone & Chalk in Sydney and York Butter Factory in Melbourne.
- We are beginning to engage with fintech start-ups themselves to explore possibilities.
- We are undertaking 'hackathons' internally and externally.
THE START-UP CHALLENGE
One of the challenges banks are working through is to understand how we can truly integrate with start-ups and other smaller organisations. During a recent trip to Silicon Valley I learned there are now organisations specialising in providing advice on setting up corporate venture funds. That makes no sense to me – if they were so good at that, why would they bother to provide advice?
Personally I don't believe we should be setting up a corporate venture unit. Not so much from an investment perspective (everybody can throw money around) but more from a capability perspective - like the ability to guide start-ups through the multiple phases of growth, which is the critical skill of successful VCs.
The main assets of banks are our ability to provide reliable and secure services for our customers, at scale, together with our experience and most of all trust. These are some of the assets we bring to any relationship and especially to start-ups.
They have unique cultures, technology capability and share our insatiable passion to solve problems.
Combining both worlds in a collaboration model that allows all parties to share experience, experiment and grow successful businesses underpinned with sound and sustainable commercial models will ultimately result in the best outcomes for our clients, communities and economies.
It's a challenge that can only be solved by smarter collaboration, not creating adversaries.
Patrick Maes is Chief Technology Officer and General Manager GTSO at ANZ. You can find him on Twitter here (@DrsPatrickMaes) and on LinkedIn here.