CBA can disrupt itself says new incubator chairman Ben Heap

The new chairman of Commonwealth Bank’s technology incubator says the bank will be able to experiment with disrupting its own profitable businesses, as it grapples with a wave technological change.

Ben Heap, an experienced venture capitalist, was on Tuesday appointed non-executive independent chairman of CBA’s unit X15 Ventures, a platform launched last year that aims to launch 25 new fintech businesses in five years.

Chairman of x15 ventures Ben Heap (right), managing director Toby Norton-Smith.
Chairman of x15 ventures Ben Heap (right), managing director Toby Norton-Smith.

Ahead of a briefing on CBA’s technology strategy this Thursday, Mr Heap said a key goal was to invest in fintech businesses that would give the bank options for products or services it could roll out as the financial world changed. CBA’s increased focus on fintech development comes as ACCC chairman Rod Sims warned the regulator would be actively reviewing any big bank acquisitions of fintech challengers on concerns it could stifle competition.

Mr Heap said the fact CBA had set up X15 not as a traditional venture capital fund, but an independent entity within the group, would help to deal with the “innovator’s dilemma”. This refers to the problem large corporations often face with disruptive technological change, because executives are concerned innovations will cannibalise their existing profit streams.


“The advantage of an X15 is CBA is able to challenge itself. It’s able to disrupt its own lines of business without creating an inherent conflict for senior managers within the bank,” Mr Heap said.

While all major banks have units to invest in fintech, CBA has stressed it will not be a passive investor and it will focus in particular on ideas that could be useful for its customers.

Mr Heap, a co-founder of fintech-focused fund H2 Ventures, will report directly to CBA’s board and is chairing a unit with about 80 staff, which is funded from the bank’s technology budget.

Alongside Mr Heap, CBA also appointed Jane Martino as its first external portfolio adviser. Ms Martino, an entrepreneur who has also been an investor and adviser to start-ups, will make recommendations to X15′s investment committee about new ventures.

“I believe the next wave of major breakthroughs for customers will be delivered via high-growth start-ups obsessed about solving problems faster and better than ever before,” she said.

CBA chief executive Matt Comyn and X15 managing director Toby Norton-Smith will this Thursday provide an update on the bank’s technology strategy, including its $US300 million ($388 million) investment in Klarna, a Swedish buy now, pay later firm.

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