16 Mar

'ANZ’s Maile Carnegie: End is nigh for big four banks' by Glenda Korporaal, The Australian

ANZ executive Maile Carnegie has predicted the end of the “big four” banking market in Australia with banks of the future becoming “dramatically simpler” as they focus on more specialised areas.

“There is not going to be room for four big banks delivering a broad range of services to the general population,” Ms Carnegie, who is ANZ’s group executive, digital banking, told The Deal magazine, which appears inside today’s newspaper.

Read more from The Deal

The edition asks industry leaders, including bank chief executives and Australian Bankers Association chief executive Anna Bligh, about their ideas on the ­future of banking.

“Because consumers are going to start demanding better personalisation of services, banks will have to choose what parts of the market they are going to try to win,” Ms Carnegie said.

“They will become a lot more strategically focused.

“Beyond, say, the next five years or 10 years, it would be surprising if the ‘big four’ construct was something that we would still be talking about.”

The former chief executive of Google Australia, who was appointed to her groundbreaking role at ANZ in July 2016, said the Australian banking market of the future would see an increasing role for financial technology companies as well as the potential entry of global e-commerce ­giants such as Amazon and China’s Alibaba through its associate company Ant Financial.

“These are giant tech companies who are already getting into ­financial services,” she said.

Ms Carnegie added that the banks that succeed in the Australian market in the future would be ones that were highly attuned to giving customers what they ­wanted.

“If you take a step back and look at what is happening to industry after industry after industry — and now including banking — there is a wave of consumers getting what they want and being in control,” she said.

She said this could drive banks to focus on servicing more specific sectors of the market that allowed them to have “much deeper relationships” with their customers.

Ms Carnegie said the evolution of the taxi industry, including the emergence of ride-sharing company Uber, gave an indication of the forces that were shaping other industries such as banking.

People’s fundamental needs for taxi-type services had not changed, but they now wanted more personalised, timely seamless experiences with much more transparency and much more control over the service being provided.

She said bank customers of the future would still want to have a safe place to deposit their money and get loans to buy a house or a car, but what would change would be how the services were delivered. “The ends are going to stay the same, but how they are delivered is going to be revolutionised,” Ms Carnegie said.

She said the mobile phone would play an increasing role in delivering banking services of the future. But there would also be other services linked with products for people on the move such as wrist watches and ear pieces.

“There is going to be an explosion of natural interfaces, which will create a different degree of functionality around mobile,” she said.

“Mobile doesn’t necessarily mean your phone — it is all about mobility, whether it is the device you are wearing on your wrist or embedded behind your ear that you can talk to and tell it to send, say, $100 to your mum.”

Ms Carnegie said ANZ’s decision to accept Apple Pay, which the bank began offering in October last year, was an example of a bank that had decided to offer a product developed by an external company because it was wanted by its customers.

Other major banks are still refusing to accept Apple Pay partly due to the cost-sharing involved.

“What is going to drive successful financial services companies of the future will be the ones who are giving customers what they want,” Ms Carnegie said. “What consumers were asking for was Apple Pay. There’s no use crying in your milk or your beer and saying ‘I wish it was my wallet. I want them to love my wallet’. But they don’t. They love Apple’s wallet.”

Ms Carnegie said ANZ’s decision to accept Apple Pay was also “a statement on the philosophy on how we were going to conduct ourselves as a bank”.

“It was a real recognition and orientation around customer needs,” she said.

There would also be much more fragmentation of product markets in the future. “If you take something as simple as a home loan, the first-time buyer is going to potentially need a different level of service including having a person to speak to, than someone who is buying their third house, who will want a different solution. Consumers are also going to demand that a lot of the current banking services are made easier for them.”

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