Bank of Queensland (BOQ) has unveiled a “refreshed” five-year strategy involving significant investment in a bank-wide “transformation” of its digital capabilities, which includes the repositioning of Virgin Money as digital challenger bank.
The bank’s five pillar strategy includes:
- embedding an “empathetic culture” to enhance the customer experience;
- a focus on niche customer segments across its brands to maximise returns;
- implementation of cloud-based technologies, beginning with additional investment in subsidiary Virgin Money;
- reducing its product offerings to cut costs; and
- maintaining a “robust” risk and compliance framework.
BOQ stated that it would deliver on its commitment by investment approximately $100 million per annum over the next few years, before reducing its investment to approximately $80 million per annum in the 2023 financial year (FY23) and to $60 million in FY24.
According to the bank, the strategic shift would build on momentum gathered over the first half of FY20, in which the bank has experienced strong above-system home and business lending growth.
This marks a reversal in BOQ’s fortunes in the lending space after the bank reported a $1.4-billion contraction in its retail home loan portfolio in FY19, offset by portfolio growth of $914 million via Virgin Money Home Loans.
George Frazis, BOQ’s managing director and CEO, attributed the uptick in lending volumes to an improvement in the bank’s assessment process, with time to conditional approval falling from an average of five days to one day.
Mr Frazis acknowledged the shortcomings of BOQ’s previous assessment policy and stressed that the improvement in turnaround times has not come at the expense of credit quality.
“The thing I want to stress is that we have not changed our risk profile, our risk appetite is the same,” he said.
“What we had was the most onerous process [and] a situation where every mortgage was checked three times – no other bank checks every single mortgage three times.
“This was all about improving the quality because of our streamlined process and then becoming more efficient.”
Lyn McGrath, BOQ’s group executive, retail, added that the bank would also look to strengthen its relationship with the broker channel to drive volume through both its retail business and via Virgin Money Home Loans.
“We are improving our strategic relationships with aggregators, implementing broker systems that matter to brokers, and enhancing our capability with people who truly understand brokers and processes that make it easier for brokers to do business with BOQ,” she said.
In December, BOQ also appointed Kathy Cummings – who established CBA’s broking business – to lead the bank’s broker strategy by appointing her to the newly created role of general manager, broker.
[Related: BOQ CEO resolves to overhaul lending process]