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Simplification, digitisation top banks' priorities in 2022

Australian banks are expected to persist with their simplification and digitisation strategies in the year ahead.

According to Tim Dring, EY Oceania banking and capital markets leader, Australian banks will need to continue their simplification and digitisation strategies in order to boost efficiencies in an environment where revenue and profitability remain under significant pressure.

“In the face of ever-increasing competition from fintechs and bigtechs – particularly in the buy now, pay later (BNPL) space – the banks will also need to improve customer experience and provide relevant, personalised offerings to consumers, that integrate seamlessly into their day-to-day lives,” Mr Dring said.

“To that end, we are likely to see more of a focus on ecosystem strategies that help the banks forge deeper relationships and capture a larger wallet share, with developments in open banking and Consumer Data Right (CDR) initiatives aiding increased collaboration opportunities in this space,” he noted.

Drawing on developments in recent years, Mr Dring stressed the need for ongoing technology investment to remain relevant in an increasingly digital world, which, coupled with increasing regulatory compliance costs, are leading to smaller banks seeking out merger partners.

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“This M&A trend is likely to continue over the next 12 months, as smaller players strive to achieve the necessary scale to remain competitive,” he tipped.

“We can also expect climate change risk to remain front of mind for the sector, particularly as the major banks participate in APRA’s first climate vulnerability assessment exercise.”

[Related: Australian Unity Bank CEO confirms departure]

Simplification, digitisation top banks' priorities in 2022
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