The Treasury in New South Wales is looking to sharpen competition in an upcoming tender for whole of government banking services, making it clear fintechs and non-banks are welcome to participate.
ANZ and Westpac are the incumbent suppliers of core banking services.
Citi has the cards contract.
These three banks have had the business for more than five years and it will be a bold move by NSW Treasury to eventually enter into any contract with a fintech or a non-bank.
The NSW government considers itself a large scale participant in the domestic banking and payments landscape, processing around 200 million transactions every year, representing almost one per cent of Australia’s annual payments volume.
“With the fintech sector booming in Australia, the state is eager to tap into the innovative talent pool to drive secure, inclusive, and efficient payment solutions for the people and businesses of NSW,” Lynne Cardwell, NSW Treasury’s executive director banking and financial services, said.
“The NSW Government is seeking market participation within the financial services sector including fintechs, banks and non-bank providers.”
The process is at the expression of interest stage and will close on May 8th.
Banks do not want fintechs anywhere near government services and will do everything in their power to crowd them out.
Sharp, smart pricing will be one weapon.
Most probably no involvement for fintechs will be the outcome of this tender.
Chances are that all the NSW banking and payments business will go to one of the four main banks (who will all compete aggressively) or otherwise to one of the global names (who will price for success).
Still, the pressure on NSW Treasury to actually award a fintech or fintechs NSW government work now looks immense.