Google could be the biggest threat to the big four banks because of the trust online users place in it and its ability to engage with customers, according to banking executives.
(Credit: Darren Pauli/ZDNet Australia)
Managers from Commonwealth Bank, Westpac, GM Bank, Rabobank and Spain-based Bankinter chaired a panel discussion at FST media's Future of Banking and Financial Services conference last week where they were challenged by members of the financial sector on their apparent slack innovation efforts.
RaboDirect general manager Greg McAweeney told an audience from the finance sector in Sydney last week that companies such as Google and PayPal are more responsive and trusted than banks.
"If Google got up and said we are going to offer a savings account, for me, that would be very difficult and confronting," McAweeney said.
"They are a non-traditional bank yet they have great reach, access, distribution and trust — they probably have more trust than most of the banks.
"Innovation will come from that side of our industry."
Panellists cited emerging technology with an emphasis on online applications as a means for the credit unions to challenge the position of incumbent banks.
Commonwealth Bank executive general manager Kelly Bayer Rosmarin said that an online-only upstart bank may challenge the position of banks by appealing to young customers and reacting faster to trends.
"There could be an interesting play to be made in a completely virtual bank that is appealing to a different generation customer who is comfortable with a new form of interaction — a virtualising of services and new ways of managing and accessing money," Rosmarin said.
"Banks can think all they want about whether they are innovative or not: at the end of the day it's what the customer thinks and it doesn't have to be the latest whizz-bang technology, iPhone or iPad," Girn said.