Westpac announced during its 2021 financial results in November that it wanted to reduce its cost base to AU$8 billion by 2024.
On Thursday, the red and white bank said it would begin implementing that plan by reducing its corporate functions by around 20% as it aims to create a "small, more focussed head office".
The change will involve moving the company's support services, including technology, finance, and HR, into a newly created division called customer services and technology, which will be headed up current COO Scott Collary, whose new title will be customer services and technology group executive.
This new division, according to the bank, will be responsible for functions that "supports our customers and benefit from operating at scale" including technology, operations, remediation, and complaints.
The bank also announced the creation of another division called corporate services, which will bring together shared services functions of property, procurement, HR services, finance services, corporate affairs, and community and sustainability. Carolyn McCann, currently customer and corporate relations group executive, will lead this new division.
"We are building a simpler bank, streamlining our organisation and lowering the cost of running the group," Westpac CEO Peter King said of the restructure.
"This is key to delivering better services for customers and better results for shareholders.
"The changes are primarily across head office and support functions, and not customer-facing roles. Bringing our workforce closer to the frontline, combined with the increases we have already made to the number of bankers, will further strengthen our franchise for customers."
The changes, which have already commenced, have also resulted in a reduction in headcount of more than 1,100 during the past quarter, which includes a mix of third-party contractors and staff, the bank said.
Additionally, the change has meant that the chief risk officer and financial crime, compliance, and conduct group executive roles have been combined. Appointed to take on the combined role as group chief risk officer is Ryan Zanin who joins the company from the Federal National Mortgage Association, also more commonly known as Fannie Mae, in New York where he was the executive vice president and chief risk officer.
Restructuring the management team will result in departure of the bank's current chief risk officer David Stephen, and financial crime, compliance and conduct group executive Les Vance. Stephen will remain in his current role until May, while Vance will finish up later in the year.
"Two years ago, we elevated financial crime to a dedicated executive role to ensure we had a single focus on improving our performance. While there is still work to do, the time is now right to simplify accountabilities with all of our risk function under the CRO," King said.
The restructure by Westpac comes as it releases its first quarter results, reporting net profit of AU$1.82 billion, an 80% bump when compared to the 2H21 quarterly average, and a steady operating income of AU$5.11 billion.
Total expenses were down by AU$191 million to AU$2.7 billion for the three months ending 31 December 2021, which Westpac said reflected the expected results of its cost reset program, including the reduction in headcount.
The group added it expects to incur a "small" restructuring charge with its first-half 2022 results, and for it to book additional restructuring charges for the full-year results as it refines the changes and the new roles.
"We have made a sound start to the year and we are seeing the cost benefits of our simplification programs. The environment however remains highly competitive, and we continue to see pressure on margins," Westpac CFO Michael Rowland said.
"Given this, we are bringing forward our simplification plans and changing our operating structure to improve efficiency and move more of our people closer to the customers they support."
Also on Thursday, Colonial First State (CFS) announced it will team up with FNZ to launch a new wrap platform by the end of the year. CFS said it has appointed FNZ to help it replace its current solution under its platform-as-a-service model. The new wrap platform is expect provide features in areas of investment selection and managed account management, adviser services, advice tech integration and data management.
The overhaul would mark the next stage of CFS's AU$430 million digital transformation over the next four years.