A Mortgage Business poll has found the threat of new entrants to existing lenders has split opinion among readers.
The survey of 182 voters found 50.5 per cent see no threat from consumer brands and new banking entrants to existing lenders, while 46.2 per cent believe new entrants will be a threat.
Last week, outgoing NAB chief executive Cameron Clyne spoke of the digitisation of the banking industry and noted the likely focus over the coming decade on which new entrants might enter the market.
“We are quite comfortable with that, it’s good for competition and good for consumers,” Mr Clyne said, adding that while new entrants boost competition, “big commercial banks” like NAB will drive economic activity.
“There is a whole bunch of activity that doesn’t necessarily suit new entrants. We participate in the business banking space that often needs custom-designed products, it needs established links with overseas institutions,” he said.
“It will be an interesting area, but fundamentally there is still a very important role for big commercial banks as a driver of economic activity.”
However, according to JP Morgan executive director Scott Manning, new entrants do not need to become a bank in order to compete with them.
As reported by Mortgage Business on April 15, the major banks’ market share is being threatened by global and local heavyweights looking to capitalise on established distribution networks.
“Innovation can take hold relatively quickly,” Mr Manning said. “Wholesale lenders' share of mortgage approvals increased from virtually zero to 15 per cent share in just over 10 years.
“Contrasting to present-day dynamics, we believe technology is creating the environment to potentially bypass the perceived traditional barriers to entry, such as vast branch distribution.”