Westpac ready to launch its BaaS platform

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Westpac ready to launch its BaaS platform

With a consumer deposit offer targeting millennials.

Westpac is ready to officially launch its bank-as-a-service (BaaS) platform with the first consumer deposit product to be released in the near term.

The bank has been building its cloud-based BaaS platform since 2019, which will allow it to offer white-labelled banking products to third parties.

Both Afterpay and SocietyOne have signed up to use the platform, with each preparing to offer its respective customers Westpac-powered financial services.

Speaking at its 2021 full year results, Westpac CEO Peter King told iTnews the BaaS service is “pretty much” ready now.  

“In terms of bank-as-a-service platform, the last major requirement has been delivered. That was the ACCC [Australian Competition and Consumer Commission] sign-off for open banking,” King said.  

“We're pretty much ready to launch now. Consumer deposits is the [first] offer and you'll hear more soon.”

Over the course of 2022, Westpac will push an early BaaS focus on deposits and transaction offerings but is expected to expand its white-label offerings to lending as well.

The bank expects its partnerships and improved banking services through the BaaS platform will allow it to grow its millennial customer base.

Once launched, the BaaS service will also enable Westpac to reduce its technology costs and replace legacy technology whilst acting as a foundation for new solutions.

App focused

On the topic of its own rebuilt digital banking app, King said Westpac has focused on capturing the millennial market and has increased its overall customer acquisition via the app.

“Digital's been a priority for the team with our new iOS app launched this year. It's a digital bank in your pocket available 24/7 increasing both the speed and functionality of what customers can do online," King said.

“One of the features introduced was a new deposit opening process and this reduced the time to get a new customer up and running to just a few minutes.

“This helped with customer acquisition, which is critical to building the strength of this franchise."

King said another update within the app is the “pathway to fully digital debit and credit cards”.

"We've also made the CVC [number] dynamic which is a game changer in security particularly online," he said.

Westpac has since launched an Android version of its app and saw an additional 1.7 million iOS customers come onboard since its initial launch.

Automated decisioning

Westpac announced it has further digitised and improved its mortgage process, leading to a peak of 810 applications per week being processed via its origination platform.

“We're seeing over 70 percent of [mortgage] applications auto-decisioned, or customers are also using the [mobile] app to track the progress of their applications, which is taking pressure off the mortgage team," King said.

“We've completed the rollout of the digital mortgage origination platform to our network and with 'first-party' done, we're now rolling out the platform to brokers.”

The bank reported 75 percent of customers are accepting loan documents digitally and 90 percent of customers are tracking status updates through to settlement via their banking app.

King added there have been “some discussions” around processing times but Westpac has a “clear roadmap for further improvements next year.”

“Having restored momentum and with brokers beginning to use our digital processes, we're well placed for the year ahead," he said.

Simplification focus

Similar to ANZ’s latest results, King reinforced Westpac's commitment targeting an $8 billion cost base by 2024 through various divestments and digital simplification projects.

Westpac first announced its digital ‘reset’ plan during its half yearly results back in May this year.

King stated the bank expects costs “to begin reducing in the year ahead” as a result of its overall simplification efforts and “key programs” including its customer outcomes and risk excellence (CORE) program.

King added Westpac has “responded to all areas raised in the AUSTRAC case, which saw the bank pay a $1.3 billion penalty for failing to implement automated transaction monitoring systems for money moving in and out of Australia.

Westpac reported a statutory net profit $5.458 billion, up 138 percent from the prior year.

The bank also recorded a cash earnings profit of $5.352 billion, up 105 percent from the same time last year.

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