UBank goes mobile

Beverley Head

NAB online banking offshoot UBank plans to offer its first mobile banking service later this year even though it has not yet recouped what the bank invested in getting its online savings account up and running.

Earlier this week NAB’s revised earnings breakdown gave some clues as to the extent of start up losses incurred by the online bank.  

Gerd Schenkel, UBank general manager, yesterday confirmed that while the organisation is now “writing positive income” it was still “working toward becoming cash positive.”  

Nevertheless UBank is already considering new products and alternative distribution channels, with mobile the first cab off the rank. Users shouldn’t however expect a cut down version of the UBank website for the BlackBerry or iPhone.

Schenkel said the bank would quiz customers about what banking services they wanted to use on a mobile – for example enquiring about their balance, or executing a transaction – and then develop and launch a mobile service.

Schenkel – surely the only bank general manager in Australia to hold a Masters in robotics – was speaking at the first Financial Services Forum organised by the Australian Information Industry Association, which is the peak industry association for the ICT sector.

Carlisle Partners principal Charles Lindop leads the forum and claims the financial services sector spends almost $2 billion on research and development each year – with 98 per cent of that spent on ICT.

Forging stronger ties between the peak industry association and its members’ largest customers seems only logical.  Just over 100 people attended the first event, although IT vendors outnumbered the bankers yesterday. Another four meetings are scheduled for the remainder of the year.

Joining Schenkel on the platform for this first session were Steve Coles, the chief information and business improvement officer of insurance firm Allianz, and Michael Walters, a director of payments and cards consulting firm Edgar, Dunn & Company.

Attendees were provided with insights regarding some of the issues bankers face when innovating.

Describing the apparent tension between NAB’s traditional banking approach and UBank’s strategy, Schenkel noted that “Banks are trying to re-emphasise their branches, but at the same time customers are no longer interested in the branch. How do we respond as an industry to the high fixed costs in the branches and still invest in ICT?”

This was not an issue for newcomers to the sector such as ING Direct and PayPal, which had no branches to distract them.

“While NAB was trying to revamp its branches these people were building new businesses,” noted Schenkel.

Acknowledging that UBank’s innovations were not going to win the bank any global innovation prizes, Schenkel said they were nevertheless the sorts of innovation that “sells a lot of product” and attract “customers that would not otherwise have come to NAB.”

UBank has also acted as a useful technology sandpit for the bank. UBank is founded on Oracle’s banking systems, which have since been confirmed as the platform for NAB’s planned core systems revamp.