NAB starts playing catchup with fintech
NAB has made some tech improvements to its loan processing systems.
National Australia Bank (NAB) customers should soon be noticing their loan, credit card, insurance and term deposit applications are processed a whole lot faster. After announcing that the rollout of the personal banking origination platform (PBOP) platform would be a key focus for 2015, the system has started processing a small number of applications and is live in a number of retail branches.
The system was first started in 2007, and after a much-drawn-out deployment, will be rolled out nationally by the end of 2016.
The new PBOP system is a key move for NAB, with CEO Robert Thorburn previously admitting "frustration and concern that the market has had...that it's cost too much and taken too long."
The platform has reportedly sped the application up considerably for existing NAB customers. Term deposit accounts can be opened in two minutes, and conditional home loan approvals can be given in 50 clicks, which is down from 250. Since the system began testing in mid-2015 it has received 4,500 credit card and personal loan applications as well as 700 home loan and 9,000 transaction and deposit accounts.
The Big Four banks have been in a veritable arms race when it comes to the adoption of new technology. One reason for that is stiff competition from smaller disruptive companies that are coming into the financial services sector and deploying new technologies.
KPMG's report Major Australian Banks Full Year Results 2014-15 showed a downward trend of return on equity and increased cash earnings, revealing systematic challenges for the banks. KMPG's Asia Pacific head of banking noted that balancing shareholder and customer interests "will be required in future to ensure disrupters are not further emboldened to attack established lenders' business models".
However, the disrupters have been arriving in droves. Peer-to-peer lending for both personal and business finance is likely prove a formidable competitor for established banks, as will fintech payment companies that are able to be more agile than the established "Big Four" brands.
Australia is not only looking to encourage these smaller lenders, but support them. Will the deep pockets of technology and innovation be enough to compete with the smaller, fintech disrupters? Watch this space.