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Digital disruption posing "biggest challenge" for banking industry: Australian CEO

Xinhua, May 18, 2016 Adjust font size:

Global digital disruption and wide scale mobile telecommunications use has created the biggest challenge to the banking industry as power shifts from corporates to consumers.

Mobile telecommunications coupled with new disruptive technologies and business models are providing the foundation stones for large e-commerce and other digital FinTech businesses through rapid technology change to capitalize on potential future growth drivers.

This rapid change has caused a significant power shift in the banking industry and consumer relationship, ING Direct outgoing chief executive Vaughn Richtor told an American Chamber of Commerce lunch in Sydney on Wednesday.

"With the advent of the internet... now the power is actually with the customer, and I can't help but think that therefore, what we have to do is use what's happening in technology and the power to the customer to our advantage," Richtor said.

"What the power shift means is that no longer can the bank hide behind banking rules and regulations (such as cheque waiting periods), you've got it to make it easier for the customer."

The FinTech industry is one of the fastest growing sectors in the global financial services with total investments in peer-to-peer lenders, payment services and internet insurers rising 60 percent to 19.1 billion U.S. dollars in 2015.

ING Direct itself started as a FinTech company, however has grown to challenge Australia's dominant "big four" banks to hold over 31 billion Australian dollars (22.55 billion U.S. dollars) in savings deposits from 1.6 million customers to become the sixth ranked banking institution in Australia. Endit