Ix) Financial Planning

· Computer programmers will determine individual's risk appetite and automatically match investors with independent, low-cost products.

"...Technology is a powerful force to change the finance system, potentially improving efficiencies and competition, and benefiting consumers..."

Murray interim report into Australian Financial System as quoted by James Eyers, 2014a

The final Murray report on Australia's Financial System (2014) mentioned the impact of the digitalisation of society on the banking industry. Technology-driven innovation is transforming the finance system with the emergence of new business models like crowd financing, mobile banking, cloud computing, new payment services, etc. All these are subjecting the financial system to more market forces including competition which should enhance both productivity and outcomes for consumers. To handle the maze of financial service regulations, the Australian Securities and Investment Commission (2015) has established a special unit to focus on these novel developments. They need to harvest the opportunities that the digital age is creating while mitigating the risks, ie

"...actions which promote entrepreneurship, innovation, adaptation and skill building, that reward 'real' risk-taking, while providing a stable macro economic environment and a well functioning financial system..."

Glenn Stevens (Governor, Reserve Bank of Australia) as quoted by James Eyers, 2015a

· In addition to competition resulting in reduced fees, another benefit for customers is reduced conflict of interests situations arising when financial planners, bankers, etc focus on products that return them highest commission rather than what is in the client's best interest

· In Australia it is estimated that $27b. of bank annual revenue is up for grabs by new technology, like personal loan books, eg

- SocietyOne (peer-to-peer lender that matches people needing a personal loan with investors through an Internet platform)

- CrowdfundUP (an alternative for businesses needing capital from brokers or investment bankers needing investors)

- Wealthfront (a US-based firm that uses algorithmic-based financial planning has built US$1b. in under two years)


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