Westpac scaling down bank branches to focus on digital

At a market update in Sydney, Westpac’s CEO Brian Hartzer said that the Australian bank will be increasing annual investment spend by 20 per cent to around $1.3 billion, using the money to concentrate on technology and digital initiatives.

‘Concentrating on technology’

Hartzer described the increased investment as a way for the bank to “hone our focus on service”.

“We are increasing our annual investment by around $200m to $1.3 billion directed towards growth, service and efficiency initiatives. This means concentrating our spend on technology, on digital, on simplification,” he added.

He also reaffirmed the Westpac’s objective of targeting an ROE of above 15 per cent and announced new performance targets, including adding more than one million new customers to the bank, a rise in products per customer and an expense to income ratio of below 40 per cent within three years.

‘Investing in digital’

“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.”

Hartzer also mentioned the formation of a Customer Service Hub that would unify the bank’s multiple systems “to give the Group one view of the customer and the ability to look at their needs and opportunities across the entire banking and wealth spectrum”.

Customer at the heart

This strategy reinforces some things Hartzer said in the past few weeks about banks’ investments and innovation strategies. He said that financial institutions should not become “mesmerised” by innovation and always remember that the customer is at the heart of the industry.

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