As the collaborative Me and My Bank Online (MAMBO) project from BPAY struggles to keep its big bank participants, an IDC analyst has suggested that smaller banking institutions and credit unions unite to complete the project.
The MAMBO project aims to issue individuals with BPAY biller numbers to facilitate the creation of a single identity for online payments, meaning that it wouldn't matter if a customer moved banks or changed account numbers in the future.
However, the project has hit a roadblock following the withdrawal of the National Australia Bank (NAB) earlier this month. NAB withdrew from the project, citing frustrations around constant delays and rising costs.
While the Commonwealth Bank and Westpac are still "deeply committed" to getting MAMBO across the line with BPAY, ANZ Bank is still weighing up its options, saying that the fault lies not with the project itself, but with the ability of the big four banks to successfully collaborate.
Speaking at the FST Summit on the Gold Coast this week, David Potterton, vice president of Global Research for IDC Financial Insights agreed with ANZ Bank's deputy CEO Graham Hodges, saying that the project was always going to be tough to deliver in terms of collaboration between the big four banks.
"Anytime you have this kind of environment with all this technology and you're moving forward, it's extremely difficult to begin with, and partly where things start to break down is where people start to look at 'what's in it for me' rather than what's in it for what we're trying to achieve collectively," he told ZDNet Australia.
Potterton said that it should really be smaller tier-two organisations who should offer to work together with BPAY to develop the MAMBO project.
"History to date has not been kind in those kinds of [collaborative] environments, and what you'll end up seeing, I think, is smaller institutions come together.
"Credit unions, for example, use technology much more interestingly. Smaller institutions who have a membership focus who are trying to provide those services [should branch out into innovation]," he said, adding that a successful project by smaller institutions would spur on larger banks.
"If someone takes the lead, everyone jumps on-board. No-one wants to be left behind. If you see it in some of the smaller institutions, you'll start to see the larger ones jump on-board."
Potterton's suggestion that smaller banks pose an innovation threat to larger banks is in line with comments made by ANZ Bank CEO Mike Smith. Smith said at a Senate inquiry into competition in the banking industry that smaller banks have the ability to move faster than the big banks when it came to technology, and could pose a real threat in future.
Luke Hopewell travelled to the Gold Coast as a guest of the FST Summit.