Bendigo and Adelaide Bank accelerates business transformation, reimagines banking

Bendigo and Adelaide Bank, Australia’s better big bank, today provided a detailed market briefing on its digital transformation strategy, including the acquisition of Melbourne-based fintech, Ferocia.

Driven by changing customer behaviours and expectations, the Bank told investors how it was positioning itself through growth and transformation to deliver new and innovative ways of banking, at pace.

Investors also heard how the acquisition of Ferocia will allow the Bank to consolidate ownership of Up - Australia’s highest rating banking app - and further develop its digital ecosystem by adding Up’s product roadmap to its existing offerings, which already includes the market leading, digital home loan capability of Tic:toc.

With more than 40,000 Up customers already saving for a home, the newest addition to the Bank’s brand family is set to introduce home loans in 2022.

Xavier Shay, CEO, Up, said the digital banking platform’s new home lending offering - Up Home - is being designed using customer data analytics to create unique customer experiences to best support individual lifestyles.

“Typically, with a home loan you’ll hear people talking about how long it takes to apply and the rate. But for us, the home loan financial product is merely the thing that enables what people really want, which is home ownership,” Mr Shay said.

“This journey is a multi-decade process. You spend years saving up for a deposit, hours or days actually going through the application process, and then potentially decades repaying.

Mr Shay said through unique insights, which will assist customers to budget, and financial tools such as roundups and repayment boosts, Up assists prospective homeowners to understand what a healthy home loan looks like.

Also speaking at the briefing, Marnie Baker, Managing Director, Bendigo and Adelaide Bank, said the Bank’s transformation is leveraging its unique human, digital and community strengths to pioneer the future of banking as Australia’s bank of choice.

“It’s our customers who are at the centre of our transformation program - they must be - and at the centre of our acquisition of Melbourne based Fintech, Ferocia is a simple, crystal-clear mandate: we are reimagining banking,” Ms Baker said.

“When we launched Up, Australia’s first and largest mobile-only digital bank platform, in 2018, we set out to disrupt the industry and shape the future of banking for a whole new generation of customers.

“Today, with the highest rated banking App, unparalleled customer engagement and a vision to be Australia’s number one consumer lifestyle brand, the time is right to scale Up and create a full-service proposition.

“As we further accelerate Up’s rapid pace of innovation and growth and further expand revenue opportunities through Up, customers of our other brands will also benefit from Ferocia’s digital innovation and experience.”

Ms Baker said the Ferocia acquisition will form a key part of the Bank’s transformation journey, supported by a long-held purpose and distinctive, customer-led strategy.

“We understand the privileged role we play in the lives of our customers and their local communities, and we know what is important to the individuals and businesses who choose to bank with us.

“We know that by feeding into prosperity, not off it, we can create long-term value for everyone connected to us, and this purpose is unique to our Bank, which is today, one of Australia’s oldest and most trusted brands.

“But along with trust, there must be capability, the necessary ingredient to our customers’ choice of banking providers.

“We’re genuinely excited to reimagine banking. We’re commercially focussed and community spirited, digital by design, and human when it matters. We stand apart in the market with our own unique strengths and opportunities.

“We have the size and capability of a big bank and pace and agility of a small bank. We are nimble and able to accelerate our digital transformation and shape the future of banking, not only for existing customers but also for a new generation of customers - building capability for the future and connections for life.

“We want to delight our customers, to give them an experience better than they expected - to reimagine the way banking is undertaken so it’s not something that our customers have to think about - but is seamlessly integrated into their lives.”

Ryan Brosnahan, Chief Transformation Officer, Bendigo and Adelaide Bank, revealed to investors further details of the Bank’s transformation program, which is focused on delivering and embedding digital capabilities, digitising and automating core processes, and reducing complexity and cost.

He said that while customer expectations have changed radically - further expedited by pandemic-induced lifestyle changes - the acquisition of Ferocia will allow the Bank to enhance its strengths and better match these elevated expectations.

“Experiences for our customers need to be always “on”, personalised, seamless and easy. Now more than ever, we are leveraging our innovation capabilities as we adapt in response to the ever-increasing pace of change of the environment we are operating in,” Mr Brosnahan said.

“We’ve clearly identified the work we need to do and the value it drives. We are simplifying our products, processes and technology, modernising our technology platform, reengineering and automating our core processes, and building new digital propositions.

“We have unique competitive advantages that can’t be easily replicated and our digital transformation will amplify these along with providing us the ability to scale efficiently,” he said.

Mr Brosnahan said the transformation program featured a significant boost in digital capabilities by rebuilding technology systems to be digital first, cloud operated and API enabled - creating connected, seamless experiences to exceed customer expectations.

“We are focused on digitising the right experiences and interactions with our customers to make these interactions easier and more convenient. This focus on digitisation through an operational excellence lens enables us to remove friction, lower our costs, improve speed, consistency and scale for growth while also being more productive,” he concluded.

Investors also heard about 2Up - the digital banking platform’s take on joint accounts - which customers identified as being a product of interest.

“About 45 percent of 2Up accounts have one or both parties as new Up customers and about 55 percent of people using 2Up have never had a joint account before. What we're seeing is that we're creating an entirely new market segment here, and at a very low cost of acquisition for us,” Mr Shay concluded.

Bendigo and Adelaide Bank acquired Ferocia in August 2021, cementing a nine-year partnership which saw the development and delivery of the Bendigo e-banking app and internet banking platform, and the introduction of Up - Australia’s first and largest mobile-only digital bank platform in 2018.

Up’s customer engagement is unparalleled when compared to global peers. Since launch, Up has welcomed more than 430,000 customers with more than $950 million deposits, empowering a new generation of savers and adding a complementary demographic to the Bank’s customer base at a low cost of acquisition, with more than two thirds of new customers generated from referrals.