NAB to spend a further AU$1.5b on 'digital-first' strategy as 4,000 jobs go

The National Australia Bank (NAB) has announced its financial results for 2017, reporting AU$5.285 billion in statutory net profit, up from the AU$352 million reported for the 2016 financial year.

While handing down its results, NAB promised an additional investment of AU$1.5 billion over three years in a bid to ensure the bank is ready for the changing, "digital-first" world.

"The environment is one of rapid and constant change," the company told its shareholders on Thursday. "Our customers are now largely 'digital-first' and expect seamless, personal experiences. New competitors continue to emerge, and community and regulatory expectations have never been greater. The risks we face are constantly evolving, requiring ever greater vigilance around cybercrime and data protection. We are optimistic about the future and the opportunities for NAB in a changing world, and we move forward as a much stronger bank.

"This allows us to plan for the longer term and today we announce an acceleration of our strategy to enable us to grow while staying focused on productivity."

A key focus of the investment will be to drive further innovation and capabilities within its small to medium-sized enterprise (SME) franchise.

"The timing and amount of investment spend may vary depending on the operating environment," the bank added.

The bank hopes to deliver improved customer experience with fewer, simpler products, via its digital channels, and reduce its operational and regulatory risks from a "simplified, more responsive, and resilient technology environment".

In putting customers first, the bank expects to lose around 4,000 staff. 6,000 roles will be impacted as NAB "further automates and simplifies" its business, while 2,000 new jobs will be created as a result of the restructure.

Business and Private Banking continued to be the bank's highest-performing sector during the 12 months to September 30, 2017, responsible for AU$2.8 billion in earnings.

During the year, NAB launched an API Developer Portal, which provides the opportunity for approved third party developers to share data with NAB.

NAB also kicked off a three-way alliance with banks in Israel and Canada, which NAB said allows the partners to work together on the design of new digital services in addition to sharing customer and startup insights.

The bank also briefly explained that it is heavily investing in new technology that will track performance, talent, capability, and deliver leadership data and insights to NAB.

NAB relaunched its mobile banking app in December, which NAB executive general manager of digital Todd Copeland told ZDNet was more of a complete experience, rather than simply an app.

With the updated app comes new features, including the ability for customers to transfer funds using the recipient's mobile number -- a move in line with the instantaneous new payments platform project the Reserve Bank of Australia will launch early next year.

Another feature is Visa card customisation that sees users able to temporarily block cards, turn off online shopping, disable PayWave functionality, and prevent cash withdrawals from ATMs.

Customers are also able to instantly use newly approved personal Visa credit cards with a digital contract feature through NAB Pay for contactless transactions less than AU$100, negating the need for a physical card.

It also launched its artificial intelligence digital virtual banker in September, specifically for SME customers to have their questions answered 24/7; this was shortly followed by the launch of its voice-activated Talk to NAB offering, allowing customers to ask basic banking questions such as how to replace a lost card or reset their password via Google Home or a smartphone with Google Assistant installed.

On Thursday, NAB also announced two of its executives across Australia and New Zealand will be switching roles, with Anthony Healy, currently MD and CEO of Bank of New Zealand, appointed as chief customer officer of Business and Private Banking, taking the role currently performed by Angela Mentis, who will pick up Healy's role in New Zealand.

For the first half of the 2017 financial year, NAB reported AU$2.55 billion in after-tax profit -- a 246.1 percent turnaround from the AU$1.74 billion loss reported last year.

For the six months to March 31, 2017, cash earnings were AU$3.39 billion -- an increase of 2.3 percent -- on revenue from ordinary activities of AU$8.64 billion, down 4.7 percent year over year.

PREVIOUS AND RELATED COVERAGE

Australian finance sector not as keen on blockchain as hype suggests: Gartner

Gartner has highlighted that curiosity is keeping the sector aware of the technology, but risk aversion is stopping it from being an investment priority.

Australian Apple Pay-avoiding banks announce their own Beem mobile wallet

Westpac, NAB, and CBA have created a joint venture to take a new wallet to iOS and Android devices later this year.

Commonwealth Bank wants to take banking back to the 1970s

Using technology, the banking heavyweight wants to get to know its customers better by restoring the relationship people had with banks over 40 years ago.