Powered by MOMENTUM MEDIA
the adviser logo
Lender

Digital disruption ‘massively oversold’, says former CBA exec

by James Mitchell5 minute read

There are no opportunities in the finance market for disruptive business models like Uber and Airbnb, according to CBA’s former executive general manager.

The emergence of new fintech players, particularly in the lending space, has been met with mixed reactions by incumbents. Some platforms aim to enable incumbents, including mortgage brokers, while others are squarely looking to disrupt established business models.

To continue reading the rest of this article, create a free account
Already have an account? Sign in

Rodney Maddock, former CBA exec and interim director at the Australian Centre for Financial Studies, says successful disruptors like Uber and Airbnb are not transferable to the financial services space.

“I just think disruption is massively oversold,” Mr Maddock told bankers at the Australian Securitisation Forum in Sydney this week.

Advertisement
Advertisement

“Everybody is really hooked on the examples of Uber and Airbnb. If you look at what happened in those cases, it was a big lot of resources – cars or houses – which were not being well used,” he said.

“The business models are basically built on exploiting underutilised resources. So yes, I can see disruption in those things. Comeback to the financial market, you have to ask: where are the big bunches of underutilised resources that people can attack? It’s a lot harder when you start to think about it that way.”

Mr Maddock said he cannot see new entrants creating in any permanent disruption to the industry.

“I guess I am a bit more sceptical about the whole disruption argument because disruption is most powerful where it uses resources that are not currently being used. I don’t see any of those in finance.”

Fellow panellist Thomas Achhorner, head of digital financial services at PwC Asia, argued that 98 per cent of fintech lenders will fail as big banks copy their models.

He added that banks are working tirelessly to product online mortgages, one area that new peer-to-peer lenders have attempted to target.

“It is fair to say that an online digital mortgage is something that every bank in this country is currently working on,” Mr Achhorner said. “Not only the mortgage itself, but a broader, ecosystem-based experience starting from the real estate purchase all the way to insurance and everything that happens downstream from the mortgage.”

[Related: Brokers more likely to disrupt than be disrupted]

Digital disruption ‘massively oversold’, says former CBA exec
internet  x
TheAdviser logo
internet  x

James Mitchell

James Mitchell

AUTHOR

James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

daniel tuttlebee resimac asset fInance ta l27zun

Resimac takes controlling stake in Sonder

Resimac Asset Finance has expanded its acquisition stake in equipment finance business Sonder Equipment Finance...

READ MORE
asic ta 2

ASIC seeks ‘common-sense solutions’ to breach reporting

The Australian Securities & Investments Commission (ASIC) has committed to “improving” the operation of the...

READ MORE
andrew mills homestart ta htfetw

HomeStart drops graduate loan deposit to 2%

HomeStart Finance, a non-bank lender backed by the South Australian state government, has lowered the deposit hurdle...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more