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‘Super apps’ to take on dominant big banks

Australian banks face a potent threat from global “super apps”, a leading fintech investor has warned.

From gaming and virtual accessories to getting a home loan or credit card, onboarding into a new job, getting paid, investing, or paying with Bitcoin, there’s potentially an app to cover everything.

Co-founder of Reinventure Group Simon Cant said on Tuesday the biggest threat to Australian banks will be the arrival of “super apps”, not a splintering of the customer base to small neobanks that operate solely online.

“The neobank threat never really hit launch velocity,” he told the AFR Banking Summit.

There’s “still more firepower than ever before” amongst Australian and United States investors despite the recent tech slide on share markets, the backer of “disruptive technology” said.

US-based tech giant Square, which acquired Australian buy-now-pay-later leader Afterpay in January, intends to take its Cash App worldwide.

The software company also wants to integrate Bitcoin into the app in the longer term, saying it is the “native currency” of the internet.

Dom Pym, co-founder of Australian neobank Up, said the big banks need to start looking at social media giants, human resources software such as Flare, and gaming apps.

“This is where people are using technology, and so they’re going to use finance and banking through that,” he said.

“That’s where the next generation of banking customers are.”

He already has 500,000 customers and is preparing to launch a home loan product later this year.

“For us it’s the only channel,” he said.

Whether gaming, or using a virtual representation of ourselves to do commerce in the virtual world, the sector is valued at over $US20 billion ($A28 billion) today and is expected to be a $US30 trillion market within 10 years.

“The way that we work and the way that we play is changing dramatically,” Mr Pym said.

“Australian banks need to be in the Metaverse,” he said.

CBA boss Matt Comyn said buying a Gucci handbag in the virtual world is not for everyone.

“I know, it sounds kooky,” he said.

But financial technology and blockchain will “absolutely” be a continuing source of innovation over the next decade, he said.

“Crypto, clearly, is a polarising topic,” Mr Comyn said.

“There is a lot of talent in Silicon Valley going into crypto and De-Fi (decentralised finance), and data analytics.”

He tipped a “shakeout” as less mature companies suffer in the tougher market conditions.

And with stablecoins collapsing, every regulator is thinking about the right level of consumer protection, he said.

Despite this year’s bloodbath, the global cryptocurrency market is valued at $US1.4 trillion.

Reinventure’s Mr Cant said he continues to see Bitcoin as a future “global reserve currency”.

But National Australia Bank executive Angela Mentis said the bank had a “wait and see” approach on any retail use of cryptocurrencies.

“What we’re really interested in is the underlying blockchain technology, and how we can use those to solve customer problems,” she said.

NAB has signed up to Carbonplace, a new carbon credit settlement platform, which uses the technology.

“Carbonplace allows our customers to buy and sell voluntary carbon credits through a blockchain carbon settlement system.”

Blockchain is also being used with agriculture customers, including NAB’s recent investment in agtech startup Geora to revamp supply chains for farmers.

NAB, along with Macquarie Bank, has also been working with the Reserve Bank on a central bank digital currency (CBDCs).

In contrast to cryptocurrencies, CBDCs would serve as a centralised wholesale “coin” used between financial institutions.

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