Australian Prudential Regulation Authority (APRA) Chairman Wayne Byrnes says competition in the financial services sector will intensify due to new technologies and shifting consumer attitudes, and the regulator will not stand in the way of change.

He told a conference in Sydney last week that technology is lowering barriers to entry while scandals in the financial sector, highlighted by the Hayne royal commission, are encouraging consumers to think harder about how they manage their money.

“For an industry that has built many of its products and practices to take advantage of customer inertia, that ‘awakening’ will only increase the challenges,” Mr Byres said at a conference in Sydney last week.

APRA wants regulated entities to be resilient, but its mandate to promote stability does not mean standing in the way of change, he says.

“It is not APRA’s role to protect incumbent players when better, safer and more efficient ways of doing business emerge.”

Mr Byres says companies should ensure existing systems are “fit for purpose” as they also focus on new technologies, cyber security and risk mitigation.

Many traditional business models will no longer be competitive without significant change driven by technological investment, he warns.

“Right now it seems inconceivable that any of Australia’s big banks or major insurers might not exist at some future point,” he said.

“But the same no doubt was once said about dominant companies such as Remington typewriters, Kodak or Blockbuster Video.”

Lines are blurring between what is and isn’t a financial services company, which may require regulators to focus on functions and the broader ecosystem of providers, he says.