5 weeks on the job: NAB CEO Andrew Irvine
NAB’s new chief executive Andrew Irvine said he will spend the next few months reviewing the strategy his predecessor Ross McEwan put in place four years ago, but he hosed down speculation of big changes by saying the market should not expect any “major pivot”.
In his first public appearance after taking over at the bank five weeks ago, Irvine said the bank’s long-term strategy would remain in place. The review would identify what management can do better, with a focus on progressing digital and data programs, and improving customer-centricity and ongoing simplification.
When McEwan laid out his plan for the bank in 2020, he said the strategy review had found that the bank had overly complex products and interactions, it was slow to respond and then deliver customer experiences and it was inconsistent. Another finding was that the bank had too much bureaucracy.
McEwan said he was not planning any wholesale changes. Better execution would be the key to better performance. He said he was not happy that the bank had a negative net promoter score and a historically low market share among younger customers.
UBank was to be upgraded to provide a “market leading digital experience” and offer a number of “new propositions” to drive customer acquisition, especially younger customers.
The consumer banking division was to be rebranded “personal banking” and offer a “radically simpler” digital-first proposition. The bank would have a single mortgage origination centre to provide a “single customer experience”.
One of McEwan’s peeves was that the bank invested in too many IT and innovation projects and wasted money in the process. His policy was to “work on what matters most, not everything.”
Yesterday’s results presentation had echoes of all this. NAB and Andrew Irvine have said the bank wants to be known for simple products and experiences, and seamless transactions.
Irvine even repeated McEwan’s comments from four years ago, saying he wants to maintain the focus on “working on what matters” and that “disciplined execution and accountability” are priorities.
Showing that he cares just as much about net promoter scores as his predecessor, Irvine said he was very disappointed that NAB had fallen to fourth place for business banking NPS, compared with the other big banks.
Ubank has been one of the bank’s success stories, with 8 per cent growth in customer numbers over the half, 18 per cent growth in home loan volume over the past year and 12 per cent growth in deposits. With customer numbers around 800,000 ubank has almost as many as Bendigo’s Up Bank brand.
Irvine said Ubank has done well “but it is nowhere near reaching its potential.”
Irvine has two things to get right in the short term. The bank gave AUSTRAC an enforceable undertaking in 2022 to remediate its anti-money laundering program, after AUSTRAC raised concerns about the group’s compliance with obligations for customer identification, ongoing customer due diligence and the adoption of an AML/CTF program that meets legislative requirements.
That program has cost the bank around $100 million a year since 2021/22 and is ongoing.
Irvine conceded that one reason NAB’s business banking NPS has fallen is because of the way an upgrade to know-your-customer processes has impacted customers.
The other immediate issue is the integration of Citibank, which NAB acquired in the middle of 2022. Irvine said the integration and migration timeline has been extended by 12 months to the end of next year due to the complexity of the new platform build, which includes a new unsecured lending platform, and upgraded marketing, payments and collections systems.
He said that when these AUSTRAC and Citibank issues are resolved, the bank will have more in its budget to invest in projects that support growth.