Westpac banks on reeling in clients online
WESTPAC will shrink its branches but invest more online as part of a strategy designed to draw in more than a million new customers.
The banking heavyweight announced it will plough $200 million more every year into improving service, growth and efficiency across the group.
Speaking to investors yesterday, Westpac chief Brian Hartzer, who took the helm from Gail Kelly in February, said the bank was accelerating its push to become one of the world’s great service companies over the next three years.
Mr Hartzer said the bank would increase spending on technology and simplify its digital offering for customers as part of its plan to lift its annual investment outlay to $1.3 billion a year.
“By investing in digital, we can use technology to redesign the customer experience, making things simpler, easier and better for our customers,” he said.
The bank would also create a “customer service hub” designed to combine multiple technology systems into a onestop shop for customers’ financial needs. New-look branches would be rolled out and would make up more than half of the network by 2018, he said.
Westpac has already been downsizing branches to “24hour lobbies”, featuring socalled smart ATMs and other new technology. Mr Hartzer said smaller branches should mean lower costs and higher returns but the bank provided no detail yesterday on the potential effect on staff numbers.
Westpac hopes the initiatives will help lure new clients, with a goal to add a million customers over the next two years, increasing its customer base by about 10 per cent.
It also wants to increase the number of products per customer, creating more “sticky” clients, meaning they are less likely to change banks.
The group said it also planned to cut its expense-to-income ratio below 40 per cent over the next three years and reaffirmed its “line in the sand” for return on equity, a key measure of profitability, above 15 per cent.
Analysts said the strategy underlined the bank’s commitment to service-focused technology and engaging clients through many channels.
Westpac shares closed 14¢ lower yesterday at $29.80.