Westpac will bump its annual investment spending up 20 percent to AU$1.3 billion as part of ongoing plans to use technology to grow its business.
In a market update on Monday, Westpac CEO Hartzer said the company plans to accelerate its execution plans over the next three years, with hopes to add over one million new customers, increase the number of products per customer, and reduce its expense to income ratio below 40 percent.
Acknowledging that technology is changing banking, Hartzer said the group will continue to make digital investments in order for it to deliver its service strategy. He outlined that technology will be used to enhance customer experience and operational efficiency.
Part of this strategy includes the development of a Customer Service Hub, which will deliver a centralised datacentre and eliminate duplicated records. Hartzer said the hub will provide the group with one view of its customers, and help it look at their needs and opportunities across the entire banking and wealth spectrum.
"By investing in digital, we can use technology to redesign the customer experience, making things simpler, easier, and better for our customers and our people," he said.
The bank added there are still significant efficiency opportunities to be had from the consolidation of systems and material cost savings to be delivered from the group's hybrid cloud technology.
Additionally, Hartzer reaffirmed the group's objective of targeting a return on equity of above 15 percent.
Hartzer said the increased investment will be supported by a complementary efficiency program, which will reduce the group's expense growth run-rate to 2 to 3 percent per annum.
"Banking is undergoing a transformation change. The measures we have outlined today will deliver a step change in the service we provide to customers, while at the same time improving our efficiency and productivity," he said.
In fact, the bank believes that its increased investment in its service strategy will increase productivity savings by 20 percent to AU$270 million per annum.
The bank will also continue to invest in its brand, including the roll out of the group's new branches, which will represent 55 percent of the network by 2018, Hartzer said.
In March, Westpac announced it was investing a further AU$40 million to upgrade its regional and rural branches in Australia. The funding is on top of the AU$23 million Westpac has already invested to ensure that more than half of its regional branch network will be upgraded to 'Bank Now' branches by 2020.
The Bank Now branches feature "smart" ATMs that will enable customers to carry out self-service banking functions such as cash withdrawals and exchange notes for coins. Customers will also be able to check their account balances, transfer money between accounts, and pay bills using Westpac mobile banking in a lounge-style area fitted with dedicated tablets.
During the company's first half year results, Westpac reported that total investment spend reached AU$458 million, with technology programs accounting for 25 percent and productivity programs making up 51 percent.
Some of these digital investments included the continued migration of server infrastructure in Westpac's new datacentre, as well as the roll out of its online mobile platform Westpac Live to 3.1 million Westpac customers.
In June, Westpac Group bought an 11 percent stake in security firm QuintessenceLabs to boost its online security capabilities, and cut down the time and costs associated with encrypting confidential data.