Commonwealth Bank of Australia (CBA) CEO Matt Comyn has said his bank is committed to spending big every year on technology to deliver the best banking experience, in a market where fintechs are starting to ruffle the feathers of the big four.
Facing the House Standing Committee on Economics on Friday, Comyn was asked what single fintech innovation would most benefit Australian banking consumers over the coming years.
See also: Why Westpac is making 'frenemies' with fintechs (TechRepublic)
"That's a very difficult question to answer," he said. "Clearly, there's a number of new entrants into the market … certainly more banking licences issued over the last 18 months than possibly in the prior 15 or 20 years. It remains to be seen, depending on what sort of innovations they're able to bring to the market."
The Australian Prudential Regulation Authority (APRA) handed out four banking licences to new players in the market in a little over a year, with neobank Xinja Bank being granted a licence to operate as an authorised deposit-taking institution (ADI) without restrictions in September. Similarly, 86 400 Ltd in July, and Volt and Judo were given APRA approval in May 2018 and April 2019, respectively.
With new digitally-born fintechs increasing their presence, Comyn said the yellow and black bank is "extremely focused" on making sure that there is very little innovation for them to bring to the market that CBA hasn't already brought forward.
According to Comyn, there has been some successful businesses that have seen growth, particularly in areas which are less regulated, such as payments.
"I think this will be constantly a balance for both regulators to encourage competition, but also have a view to either competitive neutrality or of course, some of the issues that can that can arise from some of those new business models," he said.
"For institutions such as the Commonwealth Bank, we're committed to spending more than a billion dollars in technology each year, we want to deliver the best overall banking experience and certainly the best digital experience. And I think if you take that in totality, that should be a very good overall environment for customers to benefit."
The Australian government is also looking into the opportunities that fintech and regtech could present by standing up a Senate Committee on Financial Technology and Regulatory Technology to probe the space.
Further on competition, Comyn was asked for his thoughts on Facebook's cryptocurrency play, Libra.
Read also: Told you so: Facebook's Libra cryptocurrency is a bad idea (and now its partners know it, too)
"Their plans are very ambitious. It would depend I guess, on the take up, it could have an impact for sure," he said when asked the impact on the Australian market if the coin was to get off the ground.
"There's not the same level of sort of cross-border payment flows [in Australia] as there are in some of the European countries, but we've watched their announcement with interest -- certainly I think some real regulatory challenges, notwithstanding some of the individual challenges that they're facing as a company, but I think we will continue to see greater innovation."
Comyn reiterated that payments is the area where there is the most innovation and development underway at present.
"I think Australia is lucky to have one of the most innovative payment systems in the world," he said.
"The Reserve Bank, of course, has overseen that with a number of initiatives including the New Payments Platform, and from our perspective, continuing to innovate so that we're not only improving the customer experience, but also making sure that we've got a very competitive proposition for whoever may join the Australian market is of critical importance to us."
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