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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.

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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.


“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
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James Mitchell

James Mitchell


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


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