Gen Z threatens $1.7b of bank card revenue

Original article by James Eyers
The Australian Financial Review – Page: 21 : 17-Jan-20

Macquarie Group expects a further decline in credit card lending and revenue over the medium-term, as consumers continue to embrace alternative payment methods. Credit cards and payments account for some $1.7bn of major Australian banks’ revenue, and Macquarie believes that up to 45 per cent of this could be at risk due to the growth of ‘buy now, pay later platforms’ and other payment solutions. German notes that banks are also facing growing competition from fintechs in the foreign exchange market.

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG

RBA warns on buy now, pay later dangers

Original article by Gerard Cockburn
The Australian – Page: 14 : 16-Jan-20

Documents released under Freedom of Information laws shows that the Reserve Bank of Australia had expressed concern about the growth of ‘buy now, pay later’ platforms in March 2019. The internal memorandum cautioned that the rapid growth in such platforms is beginning to present a risk to financial stability, and noted that some consumers may not fully understand the risks associated with these platforms. However, the central bank also concluded that buy now, pay later services can be more beneficial to some consumers than credit cards.

CORPORATES
RESERVE BANK OF AUSTRALIA, AFTERPAY LIMITED – ASX APT, ZIP CO LIMITED – ASX Z1P, GOLDMAN SACHS AUSTRALIA PTY LTD

Open banking rules too tough, say start-ups

Original article by James Eyers
The Australian Financial Review – Page: 13 & 16 : 15-Jan-20

The Australian Competition & Consumer Commission is responsible for the accreditation of financial services providers under the federal government’s ‘open banking’ regime. However, Fintech Australia has criticised the complexity of the process, and notes that it is expected to cost financial technology companies between $50,000 and $100,000 to gain accreditation. Fintech Australia contends that this cost will be prohibitive for many business start-ups. The open banking regime will commence in July, after initially being slated to begin in February.

CORPORATES
FINTECH AUSTRALIA PTY LTD, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Economy fear with credit in the doldrums

Original article by David Rogers, Michael Roddan
The Australian – Page: 13 & 17 : 24-Dec-19

Data from the Reserve Bank of Australia shows that lending to businesses and property buyers increased by 0.1 per cent in November and 2.3 per cent in the year to November. This is the lowest rate of growth in private sector credit since April 2010. The figures also show that growth in home loans was 0.2 per cent in November and 2.9 per cent year-on-year, while non-housing credit fell by 0.5 per cent in November and 4.9 per cent year-on-year.

CORPORATES
RESERVE BANK OF AUSTRALIA, COUNCIL OF FINANCIAL REGULATORS, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, CORELOGIC AUSTRALIA PTY LTD

ASIC bans life and consumer credit insurance cold calls

Original article by James Fernyhough
The Australian Financial Review – Page: 16 : 5-Dec-19

The Australian Securities & Investments Commission will crack down on the practice of hawking in the financial services sector. Insurers will not be allowed to sell life and consumer credit insurance products via unsolicited telephone calls from 13 January. ASIC says no insurer had objected to the proposed ban during a consultation period. The Hayne royal commission had recommended a total ban on cold calling for all insurance and superannuation products.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, COMMINSURE, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, SELECT AFSL

Remediation bill $10bn and counting

Original article by Richard Gluyas
The Australian – Page: 21 : 20-Nov-19

A parliamentary committee has been told that the total cost of customer remediation programs in the financial services sector has now topped $10bn. However, the Australian Securities & Investments Commission’s deputy chair Karen Chester said that customers have only been paid $660m in compensation to date. Meanwhile, ASIC chairman James Shipton has indicated that the corporate regulator will release updated guidance on responsible lending obligations before the end of 2019.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. JOINT STATUTORY COMMITTEE ON CORPORATIONS AND FINANCIAL SERVICES, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC

Fintechs slam CBA alerts as misleading

Original article by James Eyers
The Australian Financial Review – Page: 15 & 20 : 18-Nov-19

Raiz Invest has criticised the Commonwealth Bank of Australia for warning customers about the security risks associated with the use of fintech apps. CBA customers who use the Raiz app recently received a warning that their NetBank account had been compromised, and cautioned against sharing account log-in details with third parties. Raiz CEO George Lucas says the CBA alert was misleading and may even constitute an abuse of market power. Fintech Australia’s Rebecca Schot-Guppy says CBA’s actions are concerning given that the open banking regime is slated to begin in early 2020.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RAIZ INVEST LIMITED – ASX RZI, FINTECH AUSTRALIA PTY LTD, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, ZIP CO LIMITED – ASX Z1P, AMP LIMITED – ASX AMP, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

NAB, ANZ to be grilled over wealth exits

Original article by Aleks Vickovich
The Australian Financial Review – Page: 20 : 15-Nov-19

A federal parliamentary committee is examining the financial services sector’s response to the Hayne royal commission. ANZ Bank CEO Shayne Elliott and National Australia Bank chairman and acting CEO Philip Chronican will appear before the committee on 15 November. Shadow assistant treasurer Andrew Leigh, who is the committee’s deputy chairman, says he is concerned about the amount of time the two banks are taking to divest their wealth management units; he says the general public expects the divestments to proceed.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Loans double at non-banks as majors slide

Original article by Aleks Vickovich
The Australian Financial Review – Page: 18 : 12-Nov-19

Australia’s four major banks and their subsidiaries experienced a 10 per cent fall in market share in business lending and equipment finance in 2018-19, according to the inaugural business lending index report, put together by mortgage aggregator FAST. FAST Group CEO Brendan Wright says the ability of the major banks to service the demands of business customers is being hampered by distractions and regulatory hurdles, and that non-bank players are taking advantage of this situation.

CORPORATES
FAST GROUP, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Rapid growth in use of Buy-Now-Pay-Later digital payments – such as Afterpay, zipPay and zipMoney

Original article by Roy Morgan
Market Research Update – Page: Online : 5-Nov-19

New research from Roy Morgan shows that 1.95 million Australians aged 14+ used one of the latest ‘buy-now-pay-later’ digital payment methods such as Afterpay, zipPay or zipMoney in the year to September 2019, up from 1.38 million in the previous 12 months. Australians between the ages of 14-34 account for 55.9% of ‘buy-now-pay-later’ users, with those in the 25-34 age range making up 33.5% of all users. To put this in perspective, that age group represents only 18.1% of the population aged 14+, which means that those aged 25-34 are nearly twice as likely to be using a ‘buy-now-pay-later’ system as the average across the whole population. By contrast, Australians over 50 make up only 14.2% of pay-later users despite being 40.7% of the population aged 14+. Meanwhile, the use of credit cards is declining, with the percentage of Australians holding a credit card down about 3% points over the past year. This data is from Roy Morgan’s Single Source survey, based on in-depth interviews conducted face-to-face with around 50,000 consumers each year in their homes.

CORPORATES
ROY MORGAN LIMITED, AFTERPAY TOUCH GROUP LIMITED – ASX APT, ZIPPAY, ZIPMONEY