The 'service revolution' strategy that Westpac embarked on this year has helped drive customer growth for the bank according to chief executive Gail Kelly.
The bank today reported a 12 per cent increase in statutory net profit to $7.56 billion for the 12 months to 30 September
"During the course of the 2014 year we've actually effected a step up in our strategy, the service revolution, and I'm pleased to say that that's been well embedded and we're performing well against it," Kelly said today, announcing the bank's full-year results.
The Westpac Group CEO said the success of the strategy was reflected in a growth in customer numbers, high customer satisfaction among both consumer and business customers, improved growth and increased return.
The service revolution strategy will lead the bank "into and beyond" its bicentennial year of 2017, Kelly said.
"Effectively what this agenda is about is stepping up the rate and the pace of change, stepping up the execution of our customer-centred strategy," the CEO said during a briefing on the results.
"We're very aware of the amazing transformation that's actually occurring in the financial service industry. It's a very exciting time to be in banking. We not only have to deal with all the regulatory change and conduct and compliance requirements that come our way... but also a whole new world of banking.
"Powerful new technologies and the convergence of powerful new technologies are changing the way customers live their lives and what they're expecting out of services, and particularly out of banking services. [They are] expecting things to be a lot quicker, more seamless and easier and more personal for them.
"And so in the service revolution what we're effectively doing is reinventing the customer experience: Harnessing technologies, harnessing our people, harnessing our brands and the reach of our distribution — so from the customer point of view, to reinvent that customer experience."
The new strategy has been underpinned by the bank's embrace of Agile-based methodologies, a radical simplification of business processes and the 'digitalisation' of as many processes as possible, the Westpac chief said.
The bank is employing "a lot more flexibility at work, a lot more team-based work, working horizontally, using the capabilities of Agile, and Lean, and customer-centred design." Westpac is turning to smaller projects carried out in shorter timeframes, the CEO said.
Underpinning Westpac's strategy are three pillars: The use of data to personalise the services offered to customers ("know me"), allowing customers to use their preferred channels for banking ("empower me"), and "bank wow", which Kelly described as innovating to drive customer growth and retention by "taking the frustration out of banking".
The growth of new technologies has allowed the bank to employ its massive stores of customer data, Kelly said
"We've talked for a long period of time about actually getting to use all that rich customer information we have to deliver segmentation of one, but it's only now really possible with the possible of new technologies. With the power of social media, and digital, and mobile, big data, cloud computing — only now is it really possible to actually drive this personalised service."
An example of this during the 2014 financial year was the sending of 67 million "proactive service messages" to customers of Westpac's Australian Financial Services business.
The biggest "empower me" initiative during the year was the launch of its online/mobile platform Westpac Live, Kelly said. More than 2.7 million Westpac customers are using the platform. The CEO said she was pleased with the "seamless implementation" of the platform.
Around 10.5 per cent of Westpac's banking sales are done digitally; roughly 50 per cent of Westpac credit card sales are initiated digitally.