Westpac to roll out digital mortgage process to brokers

Earlier this year, the group rolled out a pilot of its online home loan application to St.George, Bank of Melbourne and BankSA customers.

The Customer Service Hub (CSH), which comes off the back of the banking group’s $800 million spend on system upgrades, digital transformation and innovation, is part of Westpac’s “simplifying and automating processes to make banking easier for customers” and aims to “ultimately be the centrepiece of customer origination and service processes”.

According to the bank, development through 2018 has focused on simplifying documents and developing a valuation platform ready for its launch in 2019.

While the pilot has been ongoing through Westpac’s “regional” brands, it has now been revealed that the new system will be rolled out to the Westpac brand in “early 2019” and to St.George in “late 2019”, before rolling out to brokers by 2020 and extended across other products and services following that.

According to Westpac, the “new mortgage experience” is “re-engineering the home ownership process, digitising the end-to-end home loan origination experience by 2020”.

The hub can be accessed by the customer via any online channel, with a single point for bankers to view customer information and loan application status.

The customer can track their application at any time to “have clarity on their loan application status” and can upload documents from home.

The CSH reportedly has a “simplified application assessment/approval for customer and banker, which digitises a number of manual processes”.

This follows with a digital offer and acceptance with “plain English terms and conditions and online acceptance”, concluding with a digital settlement integrated with land titles registry.

According to the bank, the pilot has resulted in a:

• 50 per cent reduction in customer documents, faster time to conditional approval;
• 25 per cent reduction in banker time spent processing;
• drop in costs from 1.7x to 1.2x with a single platform across multiple brands;
• 10 per cent increase of customer’s lifestyle and proception needs met; and
• 25 per cent reduction in the cost of mortgage origination.

The CSH provides bankers (and, eventually, brokers) with a dashboard that brings together tasks, applications, opportunities and customer information in one location, in the hopes that this will reduce the time spent searching for information.

Further, the platform aims to make customer conversations “easier”, as there will be a single view of application status and automatic data population across systems and a combined credit and verification decision resulting in quicker and consistent decisions.

Westpac suggested that by providing “greater visibility on how applications are progressing”, there would be 70 per cent fewer manual tools.

Meanwhile, the banking group expects that the customer will benefit from 24/7 tracking of their home loan application, personalised alerts and notifications, and an “automated, trackable settlement process”.

Existing customers would also benefit from “pre-population of personal information”.

Bank of Melbourne customers can also receive and sign their mortgage documents online or via their mobile through e-sign.

Westpac CEO Brain Hartzer told investors on Monday that the bank had continued to see a marked shift from branch banking to digital transactions and self-service, with branch transactions reducing by 7 per cent which “allowed” the bank to “amalgamate” 47 branches across Australia and New Zealand and remove 443 ATMs.

This follows on from last year’s announcement that it had closed 58 branches across the group.

Indeed, for the full year ending 30 September 2018, digital transactions were up by 10 per cent on last year and 6 per cent on the previous half.

Mr Hartzer continued: “With customers increasingly moving online, we have continued to build our digital acquisition capabilities including the launch of a fully digital mortgage in our regional brands.”

The bank has previously suggested that the CSH could help increase productivity, with expectations that the process to send and receive all customer documentation could reduce from 12 days to less than a day.

“Disappointing” second half

Overall, the full-year results show that it had been a “difficult year” for the banking group, which experienced a flat financial result.

Statutory net profit was up by 1 per cent to just under $8.1 billion and cash earnings were “little changed” at $8.07 billion.

However, cash earnings per share were down by 1 per cent to 236.2 cents, while the cash return on equity (ROE) was “at the lower end of the range” at 13 per cent.

The banking group’s profits were hit by a particularly “disappointing” second half.

Mr Hartzer commented: “In a difficult year, Westpac delivered a flat financial result.

“While the economic environment remains supportive, this result reflects the tough operating conditions for banks, with higher regulatory, compliance and funding costs, and increased competitive pressure, particularly in the second half.

“In addition, provisions for customer refunds and related costs, along with legal costs, were $281 million after tax (equivalent to 3.5 per cent of cash earnings) as we continued to work through regulatory investigations, remediations and putting things right for customers.”

Looking forward, Mr Hartzer concluded: “While we have more work to do, we are dealing decisively with known issues.

“We have lifted our productivity target for next year to $400 million as we continue to simplify our products, digitise our business and modernise our platforms.

“At the same time, we are continuing to invest in technology to improve service to customers and make it easier for them to do business with us.

“We are committed to supporting our customers over the long term, and [we] believe our service-led strategy remains the best way to create value for our shareholders.”

[Related: ‘Tricky’ broker model ‘mostly works well’: Westpac CEO]