Something a little different for our final cover story of the decade. We asked Which-50’s lead writers to tell ‘the story behind the story’ that most resonated with them this year. 

The four they chose are snapshots of the massive transformations which are underway in businesses and societyand they represent changes that aren’t always easy to spot until they’ve passed a tipping point. 

At the heart of these stories is a question we thought worth answering: Will Australians embrace neobanks? Do consumers actually care about their privacy? Are there unintended consequences to Buy Now Pay Later schemes?  And, what on earth is the government doing with facial recognition? 

We’ve shared a behind the scenes view of how these stories came together and why they matter. 

Thanks for your readership throughout the year and in 2020 we look forward to providing you with more insights, and analysis of Australia’s business and digital ecosystem.

Tess Bennett, Editor, 

Neobanks muscle in 

“It’s easy to copy one feature, but it’s not easy to copy all the things.” That was the response from Dom Pym, founder of neobank Up and a mobile banking product expert during an interview with Which-50. I was pressing him on an issue which had been put to Which-50: that Australia’s neobanks lack a compelling value proposition. 

The underlying critique is that mobile banking apps in Australia are actually pretty good, and consumers are unlikely to be motivated enough to move their salary deposits to an unknown brand. Without salaries, the challenger banks will struggle to raise deposits as a cheap source of funding for their loan books. 

Which-50 explored these issues in the story Australia’s Neobanks Have Cleared Key Regulatory Hurdles, But Will Customers Embrace Them? And, since then the change in the banking sector is accelerating. 

Notably, neobank 86 400 will be one of the first organisations to access customer data from Australia’s big four under Australia’s open banking regime. My colleague Joseph Brookes and I took a deep dive into the issue in October, publishing one of our most popular stories of 2019: Cover Story: Australia’s First Ten Open Banking Pioneers Revealed

Time will tell if the insurgents pose a real threat to the big banks. But for Up’s part, Pym tells me the bank now has more than 150,000 customers after launching just 14 months ago. —Tess Bennett 

Adtech’s big lie

The historian Barbara Tuchman once famously observed of a Spanish King that no experience of the failure of his policy could shake his belief in its essential excellence. “Wooden-headed,” she called him.  

I feel the same way about the adtech sector.  

This is an industry where profitability was achieved through the participants’ willful blindness towards years of obvious fraud, and which over the last two decades built a huge global platform of surveillance capitalism while no one was paying attention. Its business model is predicated upon capturing every little digital fingerprint a consumer leaves behind, hoovering it up and repackaging and reselling the unsuspecting target’s digital life to the highest bidder, in real-time as frequently as possible. Until recently, consumers, for the most part, had no idea what was really going on. 

Then, in 2018 we learned that Cambridge Analytica sold America to the Russians, and the rest, as they say, is history.

Almost since Which-50 began in 2013 the adtech industry has pushed the narrative that the consumer is happily along for the ride. So this year we decided to test that proposition.

Our February Cover Story Now every brand is creepy and the November cover story Consumers Reject All Online Tracking Without Explicit Consent neatly bookended the year and demonstrated that if anything, attitudes are hardening. 

It is only going to get worse for the adtechs. There is a privacy car smash coming and the sector is determined to ignore the reality that all the regulatory tension in the world against them. Wooden headed thinking, indeed. — Andrew Birmingham

Australia rejects facial recognition tech (for now)

2019 was the year facial recognition technologies moved from the dystopic to reality. The technology is reportedly now being used to persecute minorities in China as well as to stem democracy protests in Hong Kong. 

And as other countries roll out their own systems, there are growing concerns about the consequences of even its more limited use.  

In the UK, trials of facial recognition showed identifying and matching individuals to be dangerously difficult in real world settings. One major study revealed only 19 per cent of London police matches were verifiably correct.

While in the US an examination of the accuracy of facial recognition technologies showed it to be disproportionately bad at identifying women and minorities.

Perhaps most tellingly, in San Francisco – where much of the technology originates from – facial recognition surveillance has been banned outright over fears it would be abused by police and other agencies.

Australia is watching and, hopefully, learning. This year there was a significant push back against the establishment of a national face database and a framework for the use of the technology.Joseph Brookes 

Afterpay’s catch 

Clicking buy now on an ecommerce site, we are now faced with a myriad of options – credit card, debit card, PayPal and, increasingly, the option to pay later on platforms such as Afterpay or Zip.

For consumers buy now pay later (BNPL) platforms give them an easier way to pay for their products. They can pay in installments rather upfront or on a credit card.

What could possibly go wrong?

The sector is growing strongly with ASIC reporting as at 30 June 2018, Australians had racked up $903m in outstanding BNPL balances.

In our July cover story, one of the more interesting things we discovered from our investigations was that a good chunk of Afterpay’s revenue was coming from consumer’s late fees, which is lessening as the years go on. In fact, looks to us like their profitability was built by selling the product to people who couldn’t afford to use it.

We asked Afterpay four times in one day to comment on whether they would be profitable without late fees. The first three times they ignored the question, or attempted deflection. Finally, late in the day, they claimed they were in the “quiet period” and couldn’t comment. Oddly “the quiet period” hadn’t stopped them earlier in the day when they were answering questions they believed put them in a better light. — Athina Mallis

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