Westpac’s Director of The Garage speaks with FST Media about the rise of fintech disruptors and how banks can learn from them.
FST Media: What is your vision for The Garage, in terms of helping Westpac think and act like a startup?
Gray: Westpac is Australia’s first company and we are 200 years old in 2017. Our new CEO, Brian Hartzer, coined this mantra of how we need to start to think and act like a 200-year-old startup. My vision for The Garage is to foster that sense of entrepreneurialism within a 37,000 strong 200-year-old bank.
FST Media: What are your key priorities in the next 12 to 18 months?
Gray: Over the next 12 to 18 months, I want to build on our current work with The Garage, which is helping us focus on identifying those real customer problems that we are not solving. However, the key premise of The Garage is: how do we accelerate the service revolution? How do we deliver better services to our customers faster? In the coming months, I will be looking at how we can start to scale and do more accelerator activities around our services to our customers.
FST Media: What are your thoughts on the rise of fintech disruptors like MoneyPlace and SocietyOne and how can banks like Westpac learn from them?
Gray: SocietyOne is a brilliant example of a fintech disruptor we can learn from, given that Westpac’s actually an investor through our venture capital fund, ‘Reinventure’. If you look at it from the perspective of fintechs and what we call the ‘disruptors’, across the financial services sector there are essentially four pillars of banking. You have payments, wealth and investments, lending, as well as personal accounts and transactions. However, what we have yet to see in the fintech and startup space is any one disruptor playing across all four pillars. It is going to be interesting to watch how that space develops over the next few years.
FST Media: In your view, why have banking institutions traditionally been resistant to embracing technological change or disruption?
Gray: I would reframe that and say it is not about the reluctance of banks, rather, the issue revolves around the challenges and barriers that they have faced to embrace technological change. Firstly, all the big banks face the challenges of having a legacy book and legacy systems. Secondly, banks must meet consumer expectations across the four pillars of payments, wealth and investments, lending, and personal accounts and transactions. Thirdly, there are challenges for us both in the regulatory space, and also the corporate memory we have of the financial crises that we have faced. There is a real struggle in the financial sector between how we find the right balance in our priorities. It is the difference between a bank being a fast follower and being a laggard and missing out. One of the key areas of focus for us with The Garage is to push the envelope, in terms of how we can be a bit faster in terms of how we do things.
FST Media: What emerging trend do you feel is destined to make a significant impact on the financial services sector over the next five years?
Gray: Trends in social, mobile, cloud, data analytics will need to be accounted for in the financial services sector over the next five years. However, within an Australian context, you also have to think about how we face our diverging demography in terms of our growing millenial customer base in addition to our growing older population. From a business model point of view, there are also a few key challenges in terms of how we compete with new, emerging disruptors in financial services. I believe it is a very interesting space to be in over the next few years.
FST Media: How do you encourage your team to embrace a culture of troubleshooting and innovation?
Gray: When you create an internal disruptor, the key challenge then becomes: ‘How do you remain disruptive?’
One of the most significant issues we will need to address as The Garage matures is ensuring we can keep our edginess in terms of being disruptive. We need to avoid falling into the trap of becoming another ‘business as usual’ operational function. To prevent this from happening, we need to be constantly asking the question: ‘What is the customer problem that we are trying to solve here? Is that solution desirable, is it feasible?’
If we can answer those questions, I think we will go a long way in terms of remaining innovative and delivering new services to market.
FST Media: With respect to career development, what is the most inspiring career advice you have received?
Gray: There was a very wise general manager that I worked for recently who I respect enormously. He once said to me: ‘You have two ears and one mouth, use them in correct proportion.’
Another key piece of advice on career development was given to me a long time ago and it is something I live by. It is about taking your eyes off yourself and looking at the people around you. It is so important to focus your time on developing the people around you and bringing the best out of them, as ultimately you will bear the fruits of your toils. Finally, I cannot overstate how important it is to surround yourself with a great team, and I have been really fortunate in The Garage to have a fantastic team around me.
FST Media: Every leader has a legacy that they wish to be remembered for. Phil, what is yours?
Gray: I am really excited to be a part of Westpac’s journey, particularly around the 200th anniversary and being Australia’s first company. Prior to rejoining the corporate world, I came from a startup background, and I would really love to be remembered as the person that injected that fresh dose of entrepreneurialism into Australia’s oldest company.
Phil Gray will be speaking at this week’s FST Media event, The Future of Banking & Financial Services in Jakarta, in addition to a distinguished panel of executives across financial services. For more insights and information about the event, register here.
