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Before Commission / After Digitisation – a Pivotal Era for Australian Payments


Next Gen Insights | David Marsh |
08 April 2021

A notable gathering of executives met in Sydney last week for the Australian Financial Review Banking Summit. Notable not only because it brought hundreds of people together in the same room, but more importantly, because it brought a collective of banking thought leaders together as the industry stares into a period of change.

Chris Richardson of Deloitte Access Economics painted a positive outlook for an economy that has weathered the pandemic well. But the sessions that followed suggest we should not expect things to regress to the way they once were. But why?


Competition in the Australian Banking sector has long been a hotly debated topic. Some point to an oligopoly of four major banks, whilst others highlight a thriving fintech community. Whatever your view, it’s clear that Xinja’s recent exit from the market and NAB’s purchase of 86400 are being watched closely.

APRA chair Wayne Byres spoke about the importance of resilience. APRA have been working on creating a simpler framework for banks, which will be published later this year – ensuring that new entrants have sustainable revenue models being a key consideration.

He noted that interest from prospective neobanks remains strong, with “upwards of a dozen” under consideration, and that the changes were not intended to make obtaining a banking license more difficult. He also indicated that competition would be his 6th “C” – after Capital, Credit, Cash, Continuity and Contingency. Looking at these through a Payments technology lens, my top 3 would be Competition, Contingency and Continuity. Alongside the pandemic, Australia is also navigating repeated cycles of bushfires, floods and cyber attacks, with ANZ alone reportedly defending against 8 to 10 million threats per day.

Later that day we learned that the ACCC (Australia’s competition regulator) had approved National Australia Bank’s acquisition of 86400. In a panel discussion, ACCC commissioner Sarah Court was questioned on whether the merger was good for competition. She highlighted that 86400 had a smaller number of customers and wasn’t particularly unique in the market.

It will be interesting to see how these criteria are applied to the high-profile merger of NPP, EFTPOS and BPAY, given that EFTPOS and NPP are somewhat unique and serve a large proportion of the community. The proposed NPP/EFTPOS/BPAY merger is complicated further by a submission from the Australian Retailers Association to the Treasury Review of the Australian Payments System, stating concerns that “a merger could undermine competition in the payments system”. Perhaps the merger won’t be as seamless as some of the press releases suggest.


In the opening panel on “the big picture”, Anna Bligh, CEO of the Australian Banking Association, made a comment on the rapid move to digital accelerated by Covid-19. Scott Farrell’s session on the Consumer Data Right (CDR) highlighted the opportunity available to Australian fintechs prepared to invest in the digital economy. Australia’s Consumer Data Right is broader than just open banking, with a roadmap slated to expand the CDR to energy, telco, and other industries.

The Australian Financial Review reported recently that Jane Hume, Minister for Superannuation, Financial Services and the Digital Economy, said Canada was looking to adopt Australia’s model for consumer data sharing. Additionally, Mr Farrell stated that Singapore, New Zealand, the UK and India are all copying aspects of Australia’s regime.

The Consumer Data Right has clearly shaped the strategies of CommBank and Westpac. Westpac CEO Peter King spoke about the bank’s approach to Banking as a Service. Asked if this would cannibalise Westpac’s business, he commented that, under open banking, it was inevitable that consumers would choose to access financial services in a different way. Westpac’s approach seems well considered, as it also provides exposure to Buy Now Pay Later opportunity without the $300 million investment CommBank made in Klarna.

In a later session, ANZ’s Emma Gray put forward a vision that consumers would likely come to lean on 4 or 5 trusted partners under CDR. It is a view that seems to align with that of CommBank, who have been the first major bank to become an Accredited Data Recipient.


CommBank’s Kate Crous indicated that the bank can better fulfill their purpose of improving a customer’s financial wellbeing when the customer provides access to all their data. This level of transparency will require trust, particularly where it relates to financial matters.

Following the Royal Commission into Banking, major banks grappled with remediation work and legacy systems. The pandemic could have been a game changer for digital banks. Instead, consumers have stayed loyal in a time of crisis, an indicator that trust remains in times of uncertainty. As the pandemic subsides, consumers may become more adventurous. Feature-rich digital wallets look set to become the likely battleground as the digital point of interaction with the customer. Whether it be Zip’s integration with Pocketbook, PayPal’s support of crypto currency, or CommBank’s benefit finder, digitally ingratiating yourself with the customer has never been more important.

Looking back on this period, we may well reflect on a “Before (the Royal) Commission / After Digitisation” era. I wonder if it will be remembered as a time when those who were trusted sought to digitise, and those who were digitised sought to be trusted. One thing is for sure though: as regulators pour fuel on the competition fire, consumers look set to benefit from some new and interesting service offerings.

David Marsh

Principal Industry Consultant

With over 13 years in the payments industry, David’s career has been centred around innovation, transactional banking integration, and technology. Having worked with government clients, corporates, and the industry association for payments, he brings broad experience and a hands-on perspective to challenges and opportunities in the payments space. Away from work, family commitments permitting, David enjoys mountain biking, bouldering and DJing.


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