Westpac’s investment in digital is helping the bank cut its operating expenses, group CEO Brian Hartzer said today.
“Straight-through processing is removing manual activity, freeing up our people to spend more time with customers and reducing risk,” Hartzer told a briefing on the bank’s half-year results. “Customers are increasingly voting with their thumbs on digital,” he added, with the resulting reduction in branch traffic leading the bank to close 45 branches in Australia and New Zealand.
The bank rolled out around 100 new online features and enhancements during the six months ending 31 March.
“We’re beginning to see real expense-line benefits from our investment in digital transformation,” the CEO said. “For example, we rolled out a new end-to-end digital personal loan experience and we saw a 25 per cent increase in the number of e-statements. Behind the scenes there have also been some large advances in the use of cloud technology and process automation in areas like e-conveyancing and commercial credit assessment.”
Chief financial officer Peter King said that flat costs in consumer banking “reflected the digitalisation of processes and the continued migration of activity from branches to digital channels.”
Technology-related operating expenses dropped by 2 per cent to $989 million compared to the second half of FY16 but were up 8 per cent compared to the first half of 2016, which the bank attributed to the impact of completed investment programs leading to higher amortisation of software assets and depreciation of IT equipment as well as increased software licensing and maintenance costs.
Westpac said that its Customer Service Hub “moved from planning to development with completion of the contracts to provide the foundation technology and to build the platform,” with the bank appointing a vendor to build the foundation of the hub. The hub, originally outlined in 2015 by Westpac CIO Dave Curran is intended to leverage cloud infrastructure to deliver a single view of the customer across the group’s brands.
“Starting with mortgages, the Customer Service Hub is assisting to transform the Group’s technology infrastructure around the customer and will significantly improve the mortgage process for customers and Westpac,” the bank said today in its half-year results.
During the half, development on the bank’s new wealth management system, Panorama, was largely completed.
“Panorama’s made a good start, with $3.9 billion in funds under management at the end of March — but the latest number has actually reached $4.3 billion and the trajectory is good,” Hartzer said.
“The key elements of the platform are now complete resulting in increased activity and flows onto the platform,” the bank said in its results.
Westpac reported a statutory net profit of $3.91 billion, up 6 per cent, and cash earnings of $4.02 billion, up 3 per cent.