Bank boss spruiks cred over big tech

People still trust banks more than the likes of Google and Facebook, says ANZ boss Shayne Elliott.

ANZ boss Shayne Elliott says a lot of fintech start-ups are not as disruptive as they claim

ANZ boss Shayne Elliott says banks have a leg up on the technology giants when it comes to consumer trust, despite the banking royal commission and an impending inquiry into the big four.

At the Intersekt Festival in Melbourne on Wednesday, Mr Elliott said while banks had endured a barrage of negative press, the public, by and large, still trusted them more than the likes of Google and Facebook.

“The level of trust in banks is very high — consumers give us their most valuable assets,” he said. “There is a lack of trust around our conduct, but that’s a different issue and people not only trust us with their money but also their data.

“That’s a very valuable asset to us and that’s not always the case with tech, in terms of whether you will trust them with your most valuable personal data, so I think we do have some advantages.” However, he warned there was a dark side to the rise of data-driven banking.

Mr Elliott believes the traditional one-size-fits-all approach to building banking products is under threat from technology, a trend that could leave some consumers at a disadvantage.

“Banking is a scale business where the returns are in building market share,” he said. “That’s why we have had a one-size-fits-all model — all credit cards cost essentially the same, they are priced the same, because the ­returns are there. But today the value of risk-based pricing has gone up and the costs have come down.

“The beauty of the one-size-fits-all model is that the community essentially socialises some of the cost; we all pay the same (sort of fees) for credit cards. The future is much more about targeted pricing and more risk-based, so you are starting to see a lot more growth in the payday lending space, which is high risk and raises some ethical questions.”

While there has been a surge in fintech start-ups in Australia mainly serving small to medium-sized businesses, Mr Elliott said a large number of these businesses weren’t as disruptive as they claimed to be. “A lot of the fintechs, frankly and with due respect, offer the same old stuff with a nice interface. There’s nothing particularly innovative with the product,” he said. “It’s got a nice face on it but fundamentally the product is the same.”