Blogs > Australian banking market ready for core systems change
24 August –

Australian banking market ready for core systems change

Banks in Australia need to embrace digital technologies to meet customer expectations, says Pismo’s Oceania lead

Alexander Hamilton
3 min

Pismo spoke to Simon Keys, our Head of Business Development in Oceania, to drill down into how the Australian market differs from others regarding technology goals and adoption.

He says the Australian market has a unique dynamic regarding the deployment and development of innovative systems and products. “Leaders in these banks are aware [of the benefits of core banking change], and it’s a decision that is very important for meeting the needs of quickly evolving market.”

Open Banking arrived in Australia in mid-2020. Since then, the market has seen a greater interconnection between fintech services and traditional banking. 62% of financial institutions are using, or plan to use, integrations with Open Banking in the next 12 months.

Digital home loans demand

“Home loans dominate the Australian banking market,” says Keys. “It’s what everyone goes looking to provide. It’s a big item and a sector that has been targeted heavily by new digital banks.”

Digital banking has become a greater focus for Australian consumers, too. According to the Australian Banking Association (ABA), 80% of customers prefer to check account balances, pay bills, or transfer money online.

The branch, usually the focus of activity when it comes to lending and the home loans market, has fallen by the wayside. Just 20% of Australians prefer to use it for their essential banking activities.

Still, for digital players, ensuring service quality can be a challenge. “Trying to build a technology capability on your own,” says Keys, “to service a market like Australia – which has a population of 25 million people – is not an easy task.”

Picking the right partner

Large and small banks in Australia have pledged to make mortgage lending increasingly digital and hassle-free. The aim is for a “ten-minute mortgage”. So how can they meet these expectations?

The answer is a composable and headless banking system, able to provide services in rapid time and configured to connect to APIs within a bank’s infrastructure. Implementation time is minimal and can be measured in months, not years.

Similarly, banks should look to the customer base and implementation history of the providers on their watchlist. Does the firm have experience working with some of the largest banks in the world? Have they undertaken wide-scale change effectively or helped launch digital products in an effective and efficient timeframe?

“I think the banks are ready,” says Keys. “There are CEOs out there who are willing to make the change and challenge the status quo. The first one to make the jump will reap the rewards.”

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