NAB is accelerating its digital plans with new acquisitions and the continued rollout of a digital mortgage lending platform.

The bank recognized that its investments and technology work over the past four to five years have better positioned it to fight cybercrime, and its use of digital data and analytics to improve consumer outcomes.

Speaking at the bank’s 2022 half-year results on Thursday, NAB chief executive Ross McEwan told investors he had “over 60% of our applications migrated to the cloud”, and brought “strong improvements to our ability to fight cybercrime and reduce [the number of] critical incidents.”

NAB reported statutory net profit of $3.551 billion in the six months to the end of March and cash profit of $3.48 billion, up 4% from the first half of 2021.

AUSTRAC company drives up technology costs

NAB drew unwanted attention from financial crime regulator AUSTRAC in June last year over compliance, with McEwan saying the bank had agreed to a binding recognizance with the watchdog earlier this week.

“Under the terms of the engagement, NAB will implement a comprehensive action plan to improve our systems controls and record keeping, we acknowledge that we are tracking concerns and we will achieve this,” McEwan said.

“Many of the activities reflected in the agreed plan are underway and expected to be delivered within 12 months.”

McEwan said NAB expects to spend more than $120 million to meet business requirements.

NAB said these cost commitments, along with technology opportunities and inflation, will see NAB’s spending increase 2.6% this year.

According to NAB Chief Financial Officer Gary Lennon, “technology costs are 50% higher due to additional operating costs associated with newly deployed systems,” while “capital expenditures are lower over the six-month through March, at $649 million.”

Digital progress

McEwan added that “while we have made good progress on our digital propositions, there is still a long way to go,” with Angela Mentis, director of the digital data and analytics group, leading the bank’s initiatives. .

NAB’s investment “to improve the digital experience for customers” has seen its QuickBiz unsecured business loan system relaunched.

The bank also implemented improved account opening processes, which resulted in “an increase in the share of accounts opened digitally from 23% to 35%.”

McEwan said a “small number of acquisitions” over the past year as well as the launch of a cloud-based merchant payment portal, NAB Hive, will enable the bank to accelerate its strategic ambition.

NAB’s proposed purchase of Citigroup’s Australian consumer business also means it “can invest in better systems to deliver market-leading capabilities and drive product innovation” and work with a “suite white label partners to develop their business and ours”.

McEwan said that over the next 12 months, NAB will be focused on “completing the integration and migrating our UBank customers to the 86,400 platform they purchased.

McEwan said NAB’s home lending platform “is already delivering significant time savings for customers and bankers,” adding that over the next two years, the platform “will be used to underwrite all NAB’s mortgages, regardless of origination channel, delivering significant scale advantages.”

NAB ‘not immune’ to tech talent recruiting challenges

NAB continues to struggle to fill its vacancies in technology, stalling its migrations and – with inflation, regulatory costs and technology investments – driving up its costs.

McEwan said iTnews the bank is “not immune” to the pressures of finding tech talent, saying it is “very, very difficult”.

“We have a number of vacancies,” he said, adding that as a result, “we are seeing the cost of these resources start to increase.”

“We have to think about how we get that talent into the organization in different forms,” ​​he said.

McEwan later said that due to the health pandemic Australia had “had two years without migration” and that it was important to “reestablish Australia as an amazing place to come and work”.

Simplification progress

Speaking on the bank’s simplification strategy, McEwan said NAB is “probably about 25% through this program that we have in place.”

“It’s a good start and it’s showing very good dividends, but there’s still a lot to do,” he said.