Judo Bank will invest further in technology, digital and data to support growth in lending and help deliver a sector-leading cost-to-income ratio, a measure of profitability and operational efficiency.
The challenger bank for small and medium-sized businesses (SMEs) launched a refreshed technology strategy this week under what it is calling its "second horizon", which has it focused on growth opportunities.
Chief operating officer Lisa Frazier said its investment decisions in these areas, and in producing data insights, would collectively enable its bankers to improve customer experience delivery.
“We are focused on using technology to enable banker and customer relationships, i.e. achieving our competitive advantage," she said.
Frazier said the bank's cloud-based tech stack has cost advantages, “and this, combined with the absence of decades of legacy systems, means we have a lower cost to run our technology”.
“We have another important advantage that is often overlooked - we have a flexible tech stack," she said.
"By that, I mean, we can cherry pick solutions and technology providers to best meet our business needs and continue to optimise [total cost of ownership] going forward.”
Technology, data and digital
Frazier said Judo Bank would focus its technology efforts in four key areas.
First, it will double down on building its internal capabilities, "including investing in engineering".
It will also work to optimise cost of delivery, "removing high-cost providers via insourcing or striking different new, more cost-effective partnerships."
Thirdly, Frazier said, it would consolidate what it already has in place and seek to scale it up; the bank's automated testing capabilities were cited as a candidate for this work.
Last, but not least, the bank intends to invest in building experiences "that enables our bankers to substantially outperform the industry.”
On the topic of data, Frazier noted that data as an asset had been “generally underutilised” as it’s “often not in the hands of the frontline or decision makers”.
“Using a cloud-based data platform built to scale to deliver reporting insights, advanced analytics and leverage artificial intelligence in the future, we will deliver capabilities to bankers to enable them to scale their portfolios," she said.
“The data platform and insights tools we are building enable self-service," she said, adding that teams were already building their own dashboards.
On digital works, Frazier cited the rollout of Judo Bank's new digital banking app last week.
“Our lending customers will have digital access to their account information and product information," she said.
“Rolling out the app will remove hundreds of calls to our bankers from customers who are seeking the latest balance information statements or other transactional information requests.
“In the coming weeks, we will launch a new digital banking experience for deposit customers. This will enable us to retire the existing deposit digital banking experience, which will result in lower calls to our customer support team due to better reliability and better design.”
Frazier added Judo is planning on “introducing proven technologies such as CRM, workflow and ERP to reduce future cost growth”.
According to Frazier workflow platforms can achieve up to 30 percent productivity on various processes, CRM systems contribute to productivity, and “even ERP systems can generate up to 25 percent improvement in efficiency”.
From FY24 Judo intends to invest in technology systems that will enable scale with expectations this will “help scale our banker portfolios and will slow down future recruitment needs in areas such as operations, finance and risk.”
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