Clear strategy: Reducing complexity, investing in capability key to success
At the Bank’s 2019 Annual General Meeting, the Group’s outgoing Chair, Robert Johanson and Managing Director, Marnie Baker outlined how the Bank’s strategy, customer and community focus, leading customer advocacy and trust ratings, partnerships, innovation and a commitment to lowering costs, are providing the right environment for sustainable growth.
Ms Baker said the Bank’s strategy to reshape the business for the future, and a focus on reimagining the customer experience and lowering costs are crucial. “Our strategic imperatives to reduce complexity, invest in capability and tell our story are crystal clear. As is our commitment to a seamless customer experience, lowering our cost base in the medium term and continuing to deliver sustainable growth.”
Mr Johanson and Ms Baker both outlined how the Bank is investing to ensure it can adapt to the new digital world. “Every part of our business, what we do and how we do it is being interrogated and will need to be reconstructed,” Mr Johanson said.
During the meeting, Ms Baker discussed how the Bank’s commitment to investing in customer experience is already paying off, whilst work to remove legacy platforms and divest businesses has further simplified the business and delivered cost savings.
“A standout for the year has been our four times growth in net customers, taking us to more than 1.7 million customers. Other highlights were the launch of Up, Australia’s first and largest next-gen digital bank, which exceeded initial customer growth expectations, attracting over 130,000 customers in its first 12 months; and the adoption of Tic:Toc’s instant home loan technology to become the first lender globally to offer the technology under its own brand,” Ms Baker said.
“Partnering is in our organisation’s DNA and through our strategic partnerships, we have developed these leading-edge innovative products which appeal to customers in our key priority segments.
“As we accelerate digitisation of our offerings, establishing and fostering lasting relationships with this younger demographic will deliver significant long-term growth opportunities,” said Ms Baker.
With strong regulatory and political scrutiny on the industry, Mr Johanson, who retires as Chair today after 13 years, cautioned that the better response to alleviate the challenges facing the industry would be to “give more power to customers by ensuring that different organisations with different customer relationship propositions can compete on individual products across a level playing field. It does require the system to accept and even encourage a degree of dynamism, of instability and creative destruction,” said Mr Johanson.
“On the one hand we want to encourage credit to flow easily and cheaply into the economy so banks are encouraged to lend - and the price of money is reduced further and further. On the other hand, we want to protect the system against abuse, so we create more hurdles and barriers to do anything and so, we think, reduce the risk of mistakes,” concluded Mr Johanson.
Ms Baker said: “As we accelerate our strategy and reshape our business for the future, we continue to focus on the markets where we see the best opportunity for our relationship-based style of banking and where trust and authentic relationships are most valued.
“I am extremely proud to lead this organisation, an organisation with both capability and heart, embodying strong values and a commitment to always act in the customer’s best interests. An organisation that understands the privileged role that we play in the community,” concluded Ms Baker.
At the meeting, Mr Johanson also welcomed Jacqueline Hey as the Bank’s new Chair who commenced her new role immediately following the meeting.
The meeting elected David Foster and re-elected Jan Harris, Rob Hubbard and David Matthews. The meeting passed all resolutions and the Remuneration Report.
Links to full versions of both addresses by the Managing Director and Chair on the ASX website.