NAB profit surges to AU$3.2 billion as tech investments lead to greater efficiency gains

Australia's black and red bank nearly doubled its statutory net profit to AU$3.2 billion during 1H21, a period where the company invested in a number of digitisation and automation projects.

National Australia Bank (NAB) has reported a statutory net profit of AU$3.2 billion for the 2021 financial half year, almost double the AU$1.3 billion recorded during the same period last year.

For the six-month period, NAB posted AU$3.34 billion on cash earnings, a 48% increase year-on-year, with its business and private banking portfolio contributing nearly AU$1.22 billion.

The company outlined that during the half-year period it continued to make progress on its simplification, automation, and digitisation investments, noting that 45% of the bank's total apps were now running in the cloud. This is a bump up from the 38% that was reported in the previous half-year period. It also added that the number of applications used by the company was reduced by 7%.

As a result of its technology investments, NAB said it also improved overall resiliency against incidents, highlighting that there were only a total of 18 incidents to the end of March 2021, of which 16 were marked as "high" incidents and the other two as "critical". This is compared against the same period in 2017 where there were 139 total incidents.

The bank added it also managed to reduce fraud loss impact on the company and its customers by 21% as a result of what it claimed was a 40-fold increase in data protecting efficacy by implementing preventative tools.

Additionally, NAB said that its internet banking platform infrastructure was moved to the cloud during 1H21, after it sent NAB Connect live on Amazon Web Services during the latter half of the 2020 financial year. The bank said, since the move, the company has been reaping benefits, including faster platform performance, reduction in deployment times, increased platform security, improved monitoring for quicker incident reporting, and significant reduction in risk of platform outages.

Other tech improvements NAB said it made during the half year included expanding the use of its virtual assistant, which resulted in call reductions to call centres and an increase in the number of virtual reactions, which grew from 600,000 to 873,000 in the six months. At the same time, the number of customer queries that did not require a handover to a colleague also improved by 13 percentage points to 73%.

In November 2020, NAB launched Google messaging to enable chat and messaging services to show up across Google assets such as maps and search. In turn, the red and black bank serviced more than 3,000 enquiries through the platform and 80% of those enquiries were resolved by the first time in-channel.

"Investment in technology infrastructure, and architecture (cloud, microservices, APIs) over time has increased speed of delivery for colleagues and customers," NAB Group CEO Ross McEwan said.

During its half-year results, the bank also took the opportunity to provide an update on its remediation processes. It outlined that for its payroll remediation, AU$40 million has been back paid for payments that were owing since to 1 October 2012. Meanwhile, for customer-related remediation, more than one million payments have been made to customers since June 2018, which have added up to a total of AU$987 million, up 38% from FY20.

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