Banks pump tech as consumers shift

NAB CEO Ross McEwan. Picture Stuart McEvoy.

Financial services companies, especially banks, are starting to get a grip on some of the radical changes in consumer behaviour due to the COVID-19 pandemic.

A survey last month of 1000 mostly retail customers of National Australia Bank shows cash usage has hit a brick wall, with about 20 per cent saying they have stopped using cash altogether.

A further 40 per cent are using less cash.

The desire to be COVID-safe has also put an end to branch visits for about 25 per cent of respondents, as another 20 per cent visit less frequently.

Interactions with call centres are up, and 40 per cent of those surveyed have either started using tap-and-go or payWave, or are now finding these payment options more appealing.

In many cases, the pandemic has accelerated existing trends, such as adoption of mobile and internet banking.

For the banks, it means spending on digital infrastructure has become even more critical, just as the most benign credit cycle in living memory starts to take a vicious turn.

New NAB chief executive Ross McEwan is no different to his peers in adapting to the mega-trends.

Simpler, safer and more digital could be the mantra for the entire industry, with McEwan taking the axe to an eye-watering 467 investment projects so he can concentrate on only 19.

Almost all of them involve digital and simplification.

Of the 19, five are designed to remove bottlenecks in lending processes, four will digitise processes to enable customers to interact with the distribution channel of their choice, and six will use technology to enable the bank to move faster and more efficiently.

McEwan said at the bank’s half-year result that COVID-19 had accelerated a number of shifts in the way customers and colleagues interacted with the bank.

“We are already taking action consistent with our long-term ambition, including shoring up our balance sheet, significant portions of our workforce to remote and new ways of working, and fast-tracking efforts to help customers transition to digital and cashless transactions,” he said.

“We’re also moving on priorities important to our immediate and long-term goals which include new digital lending experiences, including building a single mortgage factory for NAB to make life easier for customers, colleagues and brokers.”