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Westpac transitioning into a ‘digital first’ bank

Westpac has several strategic initiatives that are intended to convert the traditional bank into a modern digital bank:

Westpac transitioning into a ‘digital first’ bank

Australia’s Westpac Banking Corporation has recently come out with several strategic steps to make it a digital first bank and transform the products and services offered to customers. These include a new digital mortgage system where customers have unconditional approval of loans in just 10 minutes, an updated Westpac app and initiatives for creating digital branches that facilitate anytime-anywhere banking.

The bank’s CEO Peter King has said these initiatives constitute a step towards a future banking network and service model. The bank has 5 million digitally active customers, so there is need to build a better digital banking experience, he has added.

What is most relevant about the digital transformation in the bank is that the branches have acquired the status of a key component in customer service. For example, the bank envisages that customers of its various brands will be able to do their cash transactions at any Westpac branch or vice versa.

He has also said the bank has prioritised mortgages, business lending, payments, digital channels and global transaction services, and work is underway on each of these segments.

Westpac today is a multinational banking and financial services company, one of Australia’s Big Four banks, and is the country’s first and oldest banking institution. As of 2021, it had 14 million customers worldwide, total assets of US$647,880 million and a staff strength of 40,000 people. The bank provides a broad range of banking and financial services in the Australian and New Zealand markets, including consumer, business and institutional banking and wealth management services. It has a unique portfolio of brands that comprises Westpac, St. George, Bank of Melbourne, BankSA, BT and RAMS.

NEW DIGITAL MORTGAGE

The bank’s new digital mortgage is a simple process that will soon be available to new and existing owner-occupier sole applicants refinancing to Westpac’s Flexi First variable home loans. It will then be expanded to a range of other customers and mortgage products.

The solution is a digital system that ensures end-to-end mortgage processing, making submitting application to unconditional approval easier and faster, with no paperwork.

The digital mortgage application and assessment process draws on third party data sources and uses advanced analytics to perform credit checks, verify financials and perform property valuation.

UPGRADED APP

The new Westpac app is expected to have several digital features, including ‘Track your spending’, which is an ability to track and categorise expenses to help manage the cost of living and new budgeting tools and the facility to view accounts from multiple financial institutions in the app.

PARTNERSHIP WITH MICROSOFT

Westpac has recently concluded a 5-year partnership with Microsoft to help it implement a digital and hybrid multi-cloud strategy. The bank has selected Azure to modernize its technology infrastructure and expand the use of cloud-based systems. Microsoft has worked closely with the bank, transitioning several of its critical data and customer insights platforms to Azure, including its business-critical Data Driven Experiences Platform and real-time customer insights platform.

With the help of Microsoft, the bank is building a platform using Data and Service Mesh principles. It is also aiming to migrate its data and API platform onto Azure’s cloud-native data platform-as-a-service, which includes services such as Azure Synapse, AKS, Cosmos DB and API Management. The bank will then get the best-in-class data and AI customer insights to enable unique customer interactions and benefits even while having a highly sophisticated security and privacy solution.

The bank is also making use of Azure AI and ML capabilities to enhance the intelligent processing of documents, starting with mortgages, followed by other business processes.

SEVERAL TRIALS IN AI

Westpac today has several ongoing trials with AI, including some simple offerings to customers, like the Westpac Live Alexa service. It is in the process of implementing a next generation AI chatbot in the call centre (based on IBM Watson APIs).

The bank is using ML to develop systems to improve the quality of the data analytics and leverage data better for customer outcomes through creating contextualised customer experiences.

The bank has a virtual assistant, Red, which has clocked one-millionth conversation recently. It is powered by IBM’s Watson AI conversation engine, and is designed to help with basic customer enquiries. Red has now been trained by conversation analysts to recognize more than 5000 different ways customers ask about almost 100 banking tasks and it is capable of resolving 3 in 4 queries without having to escalate to an executive.

Westpac has also entered into the highly sophisticated bank-as-a-service domain. It has collaborated with UK’s 10x Future Technologies to create a platform which allows the bank’s partners to offer banking products and services. In this effort, it has acquired Afterpay, a ‘buy now pay later’ firm.

The Group considers digitization as a tool to simplify operations and reduce costs. It hopes this will help achieve a planned $8 billion cost base reduction across the bank by 2024.

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This article has been compiled based on publicly available information on the web, particularly the bank’s own website.

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