An Interview with Steve Weston, Co-Founder and Chief Executive, volt bank
"[There is a] significant opportunity for new entrants... to leverage the latest technology and data analytics capabilities to genuinely provide the sort of support that customers need to achieve their financial goals in a far more effective way than has historically been offered by banks."
FST Media: What opportunities do you see for neobanks and challenger banks starting up in Australia?
Weston: New banks can start with a clean sheet of paper. Not being shackled by high-cost operating models, they will be able to pass these savings on via competitive pricing for customers. The more significant opportunity for new entrants though is to leverage the latest technology and data analytics capabilities to genuinely provide the sort of support that customers need to achieve their financial goals in a far more effective way than has historically been offered by banks.
FST Media: What one thing makes volt bank stand out among the banking and financial services crowd?
Weston: That we will genuinely understand what customers need to achieve their financial goals and objectives in the best possible shape.
The support that volt bank will offer customers will extend well beyond deposit and lending products that banks have traditionally provided. volt bank, with its customers’ permission, will use sophisticated data analytics to understand what customers are doing in their lives and then use that data to help customers progress more effectively on their journeys.
FST Media: Walk us through your plans to scale and potentially challenge the big four and other players.
Weston: Whilst volt bank is the first new digital bank in Australia, we have been able to learn from what has happened in other markets where neobanks have existed for some time. We have taken those learnings into consideration when formulating our own strategy.
We have also identified opportunities that we feel are less contested in the Australian market that we will pursue. All will be revealed in time!
FST Media: How will open banking and the consumer data right help to expand the growth of fintechs and neobanks?
Weston: It will allow financial services firms to enhance and tailor the offers they make; to ‘know’ them better and, through this, to provide better solutions.
FST Media: With the likely increase in regulations and scrutiny of the sector in the wake of the Royal Commission into banking, what changes do you foresee for financial services over the next two years? Will these aid or stymie volt bank’s ambitions?
Weston: We can learn lessons from other countries (like the UK) that have been through similar circumstances, where a number of reputationally embarrassing issues have come to light and where accountability schemes like the Bank Executive Accountability Regime (BEAR) have been introduced.
If we follow the same script as the UK, we will see incumbent banks inwardly focused on remediating the ‘sins of the past’ and putting steps in place to prevent a recurrence in the next few years. During this period, innovation is likely to be stymied, which will present an opportunity for volt bank to bring to market an offering that shows that banking can be done in a much better way for all stakeholders, particularly customers.
FST Media: How is volt bank building digital trust and loyalty with customers?
Weston: You have to earn trust; you can’t buy it. We will provide customers with a much more personalised and valuable offering than exists in banking today. volt bank was founded with a vision to show how banking should be done and, also, to help customers with their most difficult financial challenges. We will use customer data for good – and only with customer consent. It will only be by consistently demonstrating that we are genuine about helping customers in a way not seen in banking before that we will build trust.
FST Media: What is your vision for the future of banking and financial services in Australia?
Weston: For 600 years, distribution (measured by the number of branches or lenders a bank had) has been the competitive advantage in the banking industry. Products, on the other hand, were typically a commodity. That model is being turned on its head. Smartphones, rather than branches, will become the key distribution channel and, as a result, small firms have the same access to customers as large firms via a customer’s smartphone. Distribution will become a commodity and product offerings will become the competitive advantage. But not ‘product’ in a traditional banking sense, being a deposit or a loan. The banking product of the future is better described as a ‘journey’. Banks will understand what is going on in their customers’ lives and provide tools, services, and products (which may include deposits and loans) that will truly help customers get to their ‘destinations’ in the most effective way.
FST Media: What emerging technologies will prove the most significant support for digital banking over the next 12 months?
Weston: There is an amazing array of solutions that are being built by fintechs and other firms that will ultimately transform the way banking is done. These will include artificial intelligence (AI), machine learning (ML), chatbots, automation, cybersecurity and the like. A core competency of banks in the future will be to partner with best-in-class providers of these solutions in a way that is seamless from a customer experience perspective.
FST Media: What skills should aspiring technology chiefs invest in now for future success in the industry?
Weston: They need to effectively ‘conduct the orchestra’. Whilst they will have to be technically strong, they will also understand that the effectiveness of an IT unit will come down to how well they manage their partners and how well they integrate with all business units within the bank.
FST Media: And finally, on a personal note – how do you like to spend your free time?
Weston: With my family. As any start-up founder will tell you, time is precious, and it is not easy to get the work/life balance right. We have two teenage daughters, so life is pretty hectic. My wife and I have played tennis most weekends for many years and that is a great way to clear the head.