Announcing half-year results, Bank of Queensland unveiled its refreshed five-year strategy propelled by annual digital investments of approximately $100 million. Risk and Compliance priorities take about 20-25% of the $440mn Capex allocation in line with the trend in increased regulatory and compliance investments.
The Queensland based niche player unveiled its strategic priority is “to become a digital bank of the future with a personal touch“. A neobank with an existing customer base. The five-year strategy is aimed at enhancing customer experiences to generate sustainable and profitable growth.
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“BOQ will build on its key strengths, differentiators, and strong customer engagement through an improved digital offering to deliver sustainable performance improvement”.
Managing Director and CEO George Frazis
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Digital will underpin our business transformation
Realising that the changing environment results in less reliance on proprietary IT systems and extensive branch networks, Bank of Queensland stated the new goals aim to leverage digital and cloud-based technologies. “Our simplified structure and staged approach will allow us to rapidly adapt to the new normal”.
BOQ’s strategy “combines traditional banking with contemporary digital capabilities to better serve our customers, deliver better products and services, be nimble and improve productivity”.
We are a niche player – we know our customers, we know where we want to play and we know digital will help us deliver
Referring to the environment of digital and increased expectations, BOQ said it is working towards leveraging cloud and AI drive to improve customer experiences and drive productivity gains and reduce costs.
BOQ Boss George Frazis stated the group’s strategy is built on differentiation:
- Innovative digital offering and loyalty
- New mobile app for BOQ Specialist with Apple Pay
- Investment in Virgin Money Australia new cloud-based digital bank and loyalty program
- Strategy to transition customers to new multi-brand cloud-based banking platforms
However, the BOQ leader hasn’t ignored problems with the current IT setup.
- Multiple banking systems through acquisitions (15 core product platforms and hundreds of applications)
- Lagging digital and data platforms requiring investment
- Need to build execution capability
- Declining customers NPS
- Poor digital experience for customers and bankers
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Comprehensive Digital Transformation Agenda
Acknowledging the changes in the environment are creating opportunities for BOQ, Mr Frazis stated: “We Are Reimagining BOQ With A Comprehensive Digital Transformation”. Listing the key aspects of the transformation agenda, Mr Frazis highlighted the path for BOQ to be a bank with “all the strengths of an established bank, with the digital agility of a neobank”.
Supported by an annual capital investment of about $100Mn, the Bank is targeting digital transformation to drive growth. This includes the new common retail cloud-based platform, with Phase 1 – Virgin Money digital bank well underway. Also a common platform for the Business Bank
Bank of Queensland wants to be a Digital Bank of the Future with a Personal touch
Articulating Bank of Queensland’s Digital strategy, Mr Frazis further stated BOQ’s strategic goal is to become a digital bank of the future with a personal touch. Re-imagining banking to make it beautifully simple and rewarding. Simple and Intuitive business, with strong execution capability. Supported by technology investments and cultural changes with best in class partner relationships as well.
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Ambition to be one of Australia’s leading digital challenger banks
To achieve this ambition, BOQ is reimaging banking to make it “beautifully simple and rewarding” leading to customer benefits.
In a trend that’s visible across sectors, BOQ has prioritised simplification as a critical pillar for growth. Leveraging technology and investing in digital initiatives, BOQ plans to simplify operations and processes transforming customer experiences.
Other leading enterprises NAB, CBA, Telstra have included simplification as an important element of their strategies. Telstra’s T22 strategy has been credited with process improvements and cost reduction.
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Bank of Queensland Digital Targets For The Future
- Building the future cloud-based platform for growth
- Migrating existing customers to the new platform
- Providing richer customer experiences while driving efficiency across the business
- Backed by strong execution and oversight
- Modernise infrastructure: Migrating key data centres to the cloud
- Launch new BOQ Retail mobile app
- Deliver a new cloud-based VMA digital bank
- Migrate to a common, cloud-based core banking platform
- Automated and digitised end-to-end processes through RPA and AI
- Simplified organisational structure, with 4%-6% FTE reduction
- Enhanced cost discipline, including partnership negotiations and occupancy costs
- Simplified product offering, with 50% reduction
- Consolidated core banking and fulfilment platforms (i.e., transition to cloud-based)
