We have to be a bit paranoid: Smith 16 April 2015 3:53PM John Kavanagh ANZ chief executive Mike Smith renewed his attack on peer-to-peer lending and other digital lending models yesterday, when he said they were untested and might not perform well during an economic downturn."Those algorithms won't be as good as people say they are now," he told a lunchtime audience at a Bloomberg event.Smith said that over the years there had been attempts by participants in other industries, such as retail, to get into financial services, usually without much success."It is not as easy as it looks. It is a complex business," he said.And he said that banks had demonstrated their ability to evolve and deal with changes in distribution and other areas of the business.Still, Smith is not taking the challenge of digital transformation lightly."Some of this technology is going to be very important. Banks have to embrace it. If they don't it will be a problem for them."Should we be worried about it? Yes. We have to be a bit paranoid as an industry."Digital transformation is one of Smith's priorities at ANZ but he worries that the pace of change will be so fast that banks will not be able to keep up with it.He said it was no longer enough for a bank to look at what its competitors were doing. "I have to look at Alibaba, Google and Amazon are doing. Customers will ask why we can't do things like that."Our systems are built around accounting systems. We have to move to a customer system. We have all the information. It is a question of making the transition."