CEO of National Australia Bank Ross McEwan announced the remediation costs arising from customer misconduct and staff underpayment could impact 2H20 results.
Revealing the extent of the remediation impact on NAB, Mr McEwan said in a note sent to colleagues on the 23rd of October, the process could take months and continue well into 2021:
- a net increase in provisions for customer-related remediation matters of $380 million before tax ($266 million after-tax)
- a net increase in payroll remediation provisions of $128 million before tax ($90 million after-tax); and
- an impairment of property-related assets of $134 million before tax ($94 million after-tax).
“We are moving as quickly as possible to find and fix these issues and want to make sure we get this right”, said Mr McEwan.
“As we have said previously these issues are not acceptable. This again demonstrates the importance of getting the basics right and the impact on people and our business when we don’t”.
Also read: Cybersecurity a key priority for Australian CIOs: Adobe Survey
Impact on Technology budgets?
Although NAB has been on an insourcing path for the last few years, the tide seems to be turning. COVID and cost pressures have slowed down insourcing while outsourcing has increased. The remediation costs will definitely have an impact on the technology spend at NAB. It is understood the technology budget for NAB in the new FY ending Sep 2021 could be much lower than the investments from the previous FY.
Flexible Working Options
The Melbourne-based big bank had already notified staff that it would indefinitely stop using its Docklands offices at 700 Bourke Street and 800 Bourke Street. A major proportion of the NAB staff work from these buildings.
With employee experience becoming a top priority across the industry, top enterprises are offering work from home flexible arrangements post-COVID days.
The in-person branch banking model is also making way to online and digital support. NAB recently announced the change was supported by key statistics:
- Over 90% of NAB’s customer interactions are now taking place online or by phone
- More than 50% of customers log into NAB digital banking via the app or online
- Over-the-counter transactions have reduced by 25 per cent in the past year
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