NAB CEO: ‘Complexity is killing us’

Technology is the “foundation and accelerator” of NAB’s multi-year effort to simplify the bank, CEO Andrew Thorburn said yesterday.

Speaking to media on Thursday as part of NAB’s half year results, Thorburn described the urgent need to “simplify” adding “the complexity in the bank is just killing us".

While that will be achieved in part from the announced sale of NAB’s insurance, superannuation and financial advice arm MLC, the bank is also untangling its IT systems.

Describing a strategy launched nine months ago, Thorburn said: “We put a simpler bank, less people, and we automate, but, also, we put in some scores around Net Promoter Scores, our client experience, and we also put that we need to reduce the complexity of the bank – less products, and less IT applications.”

NAB said it was aiming to reduce the number of applications within the bank by up to 20 per cent, with 2 per cent already axed. Required applications will be increasingly moved to the cloud: Nine have been since the strategy began, and there is a target to shift 39 more by the end of 2018. NAB has registered $146 million in software write-offs over the period.

More use will be made of microservices and APIs to link systems, the bank said, tools which are “resilient, reusable, flexible and proven”.

As a result of the work, the bank is already enjoying a reduction in the number 'critical' and 'high priority' incidents caused by technology failures, which have plagued NAB in recent years. 

Investment in technology had led to an 87 per cent reduction in high priority incidents and a 90 per cent reduction in 'critical' priority incidents, the bank claimed

The major rationalisation of NAB’s technology is the responsibility of the bank’s chief technology and operations officer Patrick Wright who joined the organisation in April from Barclaycard.

Joining him in April were his direct reports Yuri Misnik, executive general manager business enabling technology, who is responsible for all of NAB’s business-facing technology teams including digital technology and corporate functions; and Kyle McNamara executive general manager leading the bank’s program management office.

Over the next two years NAB will shed 6000 positions from across the business while creating 2000 new full-time technology-focused positions in areas including data science, AI, robotics, automation, and digital. Around 1,050 staff have left so far.

The bank announced in November it would immediately hire 600 technology specialists in software engineering, data, architecture and security (a target achieved in January). A ‘Cloud Guild’ was launched in April, aimed at upskilling 2000 employees in cloud technologies.

The initiatives were all part of building a “world class” technology team, Thorburn said.

NAB’s half-year net profit was $2,583 million, a slight lift of 1.5 per cent on last year. Underlying cash earnings were $2.77 billion for the half, down 16 per cent on last.

“I think, at NAB, we’ve got the right plan. We are investing four and a half billion dollars over the next three years to focus on our clients, to make the bank simpler and faster, and to capture growth opportunities that we think are in front of Australia. The plan we’ve got, more than ever, I believe is the right one,” Thorburn said yesterday.

“We are improving the experience of our customers, reshaping our workforce and growing our bank in an environment of rapid technological and regulatory change,” he added.