Consumers want more from banks
New report by fintech friendly software company says platforms are the future
Financial services is in the middle of a slow-motion revolution in “platformification”, where consumers expect a better experience from financial institutions across websites, tablets, and smartphones.
A new report by Australian software company Avoka says that e-Retailers like Amazon and P2P fintechs are having such a profound effect that they’re shaping what consumers expect from banks and other major financial institutions.
“People have an expectation of doing all their business as easily as it is to use Amazon,” Phil Copeland, CEO of Avoka, told AltFi.
“So there is just a lot more work to be done these days to meet those demands… Consumers want convenience and ease of use.”
While pressures to make more consumer-friendly platforms should be obvious, most financial institutions are failing to adapt. They have preferred cheap easy short-term fixes to their platforms rather than ambitious wholesale reform, the report concluded.
“They’re typically building a small solution - it might be a credit card or account opening solution,” Mr Copeland said, “rather than investing a lot of money in building up their lower level platform they’re focussed on solving a specific problem that the business has.”
Avoka is a Sydney-based software company that focusses on digital customer acquisition in financial services. It got going in 2002 and got big providing services to government departments trying to connect with citizens and businesses. To date, its clients have included major banks like Westpac, Citi and HSBC.
As per its report, Avoka sees the platform revolution as an open hunting ground for software providers like itself, as they are perfectly seated to provide solutions for big clients.
While not a fintech company per se, the company sees itself as a close cousin.
“We think of fintech space as being two distinct types of companies: those building products that are challenging or disrupting traditional business, then companies like us that are fintech enablers," Mr Copeland said.
“We enable existing financial institutions to modernise and digitise their own business. Ours can be used by disrupters but more often than not it’s used by traditional companies to modernise and digitise their businesses.”
Asked by AltFi which financial institution was doing a good job of adapting to the platform revolution, Mr Copeland - perhaps surprisingly - said the Commonwealth Bank of Australia.
“CBA has built out a massive platform but not everyone can do that.
“If you go to any conference on banking, the Commonwealth Bank is often cited as one of the leaders in this space. They did it by brute force by investing a lot and building out large development teams to custom build those kind of solutions.”