Westpac announces digitally-driven 'reset' plan

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Westpac announces digitally-driven 'reset' plan

As it looks to reduce its cost base by $8 billion by 2024.

Westpac sees digitisation as a driver to simplify its operations and reduce costs, contributing to a planned $8 billion cost base reduction across the bank targeted by 2024.

CEO Peter King said that existing levels of technology investment would remain unchanged despite the cost reductions.

“We are strengthening out focus on costs and today have announced a three-year cost reset plan to set us up for being a more streamlined, simpler organisation with a stronger digital focus and smaller head office,” King said.

King said Westpac’s business approach includes “renovating our end-to-end processes and policies and using technology to digitise them.”

“We've prioritised mortgages, business lending, payments, digital channels and [global transaction services], and work is underway on each," he said.

“While most of this investment is directed to our frontend capability we're also focused on the quality of our data and our data infrastructure. 

"This is particularly important to improve reporting and customer outcomes.”

Westpac said it would pursue “smaller, more discrete projects” when it came to technology spend.

King called out Westpac’s banking-as-a-services capabilities as "a bit of a foothold” for the bank's digitisation. He also said APIs and cloud services had "a massive role to play".

“The benefit of cloud is not only the variable costs, but more the software that's built on the cloud is what's called 'evergreen' so it upgrades itself regularly," King said.

"You don't get these [situations] where you have to hop between versions.”

As the bank continues to build focus on digital transformation, King said Westpac will be looking to expand its engineering teams.

“Generally, data architecture, data analysis, process engineers and technology in general I would think we would have more demand for over the next couple of years," he said.

In addition, staff in its business divisions will need to upskill and become knowledgeable in digital technologies.

Westpac reported a statutory net profit of $3.443 billion, up 189 percent compared to the same period the year prior.

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