Jason Yetton, Westpac Group executive in retail and business banking, believes raising education standards, providing more support for small to medium enterprises, and ensuring that government polices support research and development will help businesses better respond to the technology-related changes that are currently occurring.
During his presentation at the Trans-Tasman Business Circle in Sydney, Yetton highlighted that all industries, including banking, have entered into a world where business as usual is no longer good enough, and digitisation is customer led -- not business led.
He said that despite a general awareness by industries that times are changing, more support is needed. For example, he said the education sector could potentially lead in this by taking advantage of the emerging middle class in countries such as India and China.
"This is Australia's largest non-export industry and the third-largest after iron ore and coal, generating about AU$15 billion in revenues each year. The opportunities presented by the emerging demand for education and reskilling in the Asia-Pacific, including through online technologies, are immense," Yetton said.
Education is also another key area that will help support 60 percent of Australian SMEs that do not have the skills to make the most of online services, Yetton said.
"As we know, online sales have increased significantly, growing by 25 percent from 2011 to 2012. While the rate of growth has slowed in 2014 to about 13 percent, it is still growing at a faster rate than traditional retail.
"So we need to provide forums and avenues for education and advice on technology and online for our SMEs," he said.
At the same time, Yetton pointed out that Australia is not investing enough in R&D because factors such as government policies, grants, tax incentives, and projects such as the National Broadband Network (NBN) are hindrances. In comparison to global counterparts -- such as the United States, which will spend around 2.8 percent of its total GDP on R&D -- he said Australia will only spend AU$9.2 billion on R&D in 2014-15, which translates to only 0.56 percent of GDP.
When it came to speaking about where Westpac stands in all of these changes, Yetton admitted that the "digital era" is forcing the bank to rework its operations and products. However, he noted that conventional channels such as its branches will continue to play an important role -- but not in the "traditional manner".
For instance, Westpac recently announced that it is investing AU$40 million to roll out 150 Bank Now branches over the next three years to rural Australia, which are smaller and fitted out with tablets and video-conferencing facilities.
The Bank Now branches are part of Westpac's overall "digitisation" program. Last year, Westpac's focus on technology helped it achieve profit of AU$3.6 billion for the first half of the 2014 financial year.