NAB CEO Andrew Irvine wants to lead a ‘massive cultural shift’, tells bank staff to step up

CEO Andrew Irvine has set a bold target for it to become the ‘most customer-centric company’ in Australia and New Zealand, as he lamented that improved momentum had not led to better customer advocacy.

NAB CEO Andrew Irvine has set a bold target for it to become the ‘most customer-centric company’ in Australia and New Zealand.

National Australia Bank boss Andrew Irvine has set a bold target for the bank to become the “most customer-centric company” in Australia and New Zealand, as he lamented that improved operating momentum had not led to better customer advocacy and loyalty.

As part of a strategy refresh, Mr Irvine addressed NAB’s 600 most senior leaders on Tuesday and on Wednesday dispatched an email to all 38,000 bank employees outlining his blueprint for the future.

Mr Irvine told NAB’s leaders the changes would underpin a “massive cultural shift” for the bank as it up-ended a spate of areas including its operations, investments, the hiring and promotion staff, the running of technology systems, risk management and how it rewards employees.

“This is going to take a significant change of how we all show up for work every single day,” Mr Irvine, who formally took the CEO reins in April, said. “We’re taking the strong foundations built during the past five years, and we’re raising the bar. Today, we are recognised for delivering and for doing what we say we will do.

“But we have not translated that improved operating performance into better outcomes for customers and better advocacy with our customers. And we start changing that today.”

Mr Irvine will provide more detail on the strategy evolution and investment plans on November 7 when he hands down NAB’s full-year earnings.

NAB CEO Andrew Irvine took over from Ross McEwan. Picture: David Geraghty/NCA Newswire

NAB’s interim results showed a mixed picture on its net promoter score relative to its major bank peers. In the mass consumer segment, NAB ranked second, with a score of negative three, while in the business segment the bank was in last spot among the biggest four lenders. NAB did rank first on net promoter score in the high net worth and mass affluent part of the market, according to its interim results presentation.

The rankings were based on data from DBM Consumer Atlas and DBM Business Atlas, part of insights and data group RFI Global.

Mr Irvine’s email to all NAB staff, obtained by The Australian, said the bank would continue its “twin peaks” focus on customers and colleagues, but he urged employees to step up on customer centricity and getting tasks executed.

“We have become a better bank, recognised by investors and regulators for doing what we said we would, and we are now a top quartile engaged workforce,” he added in the email.

“We must aspire to more. That means lifting our ambition and becoming a far more customer-centric, simpler and fast-paced organisation, while retaining important disciplines and keeping the bank safe.

“Our strategy is evolving, and so too should our culture. We are lifting our sights to become the most customer-centric company in Australia and New Zealand. Not just the most customer-centric bank – the most customer-centric company.

“Customers need to be the ‘everything’ of who we are.”

Since taking the reins at NAB, Mr Irvine has spoken about building on the momentum of his predecessor Ross McEwan and the need for structural changes across the economy including a radical rethink of property and land taxes, planning processes and the types of dwellings being built, to address the nation’s housing supply and affordability crisis.

The customer-centric mantra has similarities to that of former NAB CEO Andrew Thorburn, who in 2017 told a parliamentary committee that CEO stood for customer, employees, owners “in that order”.

“Customers are our lifeblood; without customers, we have no bank. More than this, we strive for our customers to trust and respect us,” he said at the time.

Each NAB executive role during Mr Thorburn’s reign was prefaced with the words chief customer officer for the division they led. Mr Thorburn along with then NAB chairman Ken Henry were casualties of the Hayne royal commission, after the final report singled the pair out for a mention over a failure to take responsibility for the bank’s governance lapses.

At Commonwealth Bank, former CEO Ralph Norris – who led the lender for six years until late 2011 – also made lifting customer satisfaction levels a key plank of his overarching strategy alongside overhauling legacy technology.

Both banks were lambasted during the royal commission for their poor treatment of customers, particularly in wealth management.

Investors and analysts will want to understand how Mr Irvine’s plan will work in practice, and whether he has firm metrics to target on net promoter score or customer satisfaction.

Mr Irvine’s email said: “Customer obsession is about who we are when it’s hard, not just when it’s easy. Whether a colleague sees customers every day or not, everyone needs to be focused on the end customer to achieve our strategic ambition, which is why we are here … I’m excited about this. We are changing our approach.”

NAB has made some progress on the regulatory front and addressed many of its compliance issues.

In March, the prudential regulator removed a requirement that NAB hold an additional $500m in capital that was linked to governance failings. The measure had been imposed by the Australian Prudential Regulatory Authority in 2019.

NAB did cop a fine late last year for unconscionable conduct after it continued to levy periodic payment fees even though the bank knew it was overcharging customers. That penalty related to conduct between early 2017 and mid-2018 and entangled 2,888 personal customers and some 500 business customers.