With cloud-based solutions readily available for challenger banks and startups to tap on, banks must quickly decide who they want to serve, says Alex Twigg, co-founder of freshly-approved Judo Bank.
There is no lack of technological solutions and platforms from which fintechs or challenger banks can tap on today, but the challenge for incumbent banks would lie in finding a niche to dominate.
«Technology is the easy bit. [K]eeping the differentiation in the marketplace is really hard,» said says Alex Twigg, co-founder of Judo Bank, who was speaking at the Temenos Regional Forum in Singapore on Tuesday. He went on to explain that his team took only 12 weeks to deploy his digital banking solution to the market, after completing the hard work of capital raising in the initial years.
Finding A Niche
Faced with open banking regulations and new competitors, it is critical for banks and financial service providers to know which segments they wish to serve. Judo Bank, which obtained its full license in Australia earlier this year, has chosen to set itself apart by lending only to Small-Medium-Enterprises (SME).
Although Judo Bank's staff had experiences in different parts of banking, they eventually decided that Australia's small businesses needed their services most.
«Where is the really specific customer need and go after that really hard,» advised Twigg.
Many Banks Could Disappear
According to a Gartner report last year, some 80 percent of heritage financial services firms will be irrelevant by 2030 due to digitalization. «This is probably the most exciting times of banking probably in a long time,» said Twigg.
Australia’s deposit-and-lending market has been overwhelmingly dominated by four large lenders — Commonwealth Bank of Australia, Westpac Banking Corp, Australia and New Zealand Banking Group and National Australia Bank, «Reuters» reported.
