Banks to prioritise digitalisation in 2018

Currently 0% of Australian banks view themselves as "digitally mature" or digital leaders.

Eighty percent of Australian banks say that digital transformation is a key priority for the year ahead, according to the latest findings from the EY Global Banking Outlook 2018 report. It seems the banks have a long way to go, given that 0% currently view themselves as being digitally mature, or as a digital leader. In comparison, 19% of global banks view themselves in this way.

The good news is, the intentions are there. Sixty percent of Australian banks are aiming to reach digital maturity by the year 2020. To do this they'll predominately focus on strategic partnerships, with 82% saying developing ties with fintech players, investing in technology to reach customers and improving risk management are top priorities for the year.

EY Oceania banking and capital markets leader Tim Dring acknowledged the digital progress local banks have made over the past year. "Australian banks have already made significant progress in this space and we are already seeing them make significant advancements in areas such as mobile payments platforms, fraud protection, biometric authentication and the use of robotics process automation."

“Australians have always been early adopters of digital and mobile technology – in fact, the recent EY Fintech Adoption Index found that we have the fifth highest rate of fintech adoption in the world. So, I think what we are seeing in the comparison of digital maturity level is that Australian banks are likely to be benchmarking themselves against emerging competitors and online leaders in other industries, who have more digitally-focused business models and less legacy technology systems to navigate. Whereas banks in other markets, like the US where cheques are still prevalent, may be benchmarking themselves against more traditional competitors,” said Dring.

The banks certainly aren't wasting any time. Just this week Macquaire partnered with popular personal finance app Pocketbook, enabling the fintech to connect to its open data sharing platform via the use of Application Programming Interface (API) technology. Pocketbook is the first Australian fintech to connect with the bank to share customer data in this way, allowing its customers to add their Macquarie bank account details to their Pocketbook account and manage their finances within the app.

And in the local payments space, last week we saw Bankwest launch its new Halo payment ring enabling customers to make contactless purchases with a fist bump. In the same week, Westpac introduced its iMessage shortcut, allowing customers to transfer money to friends without leaving their iMessage window, a first for Australian banking.