BoQ boss plans more takeovers to challenge big four rivals

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“This makes us more resilient but also more aligned with Australia’s economic growth,” said Frazis. “It also balances our retail and investment banking around 50/50. It is a bigger base to grow.

The Commonwealth Bank has sought to gain market share through NAB’s national dominance in the business loan market, making it a difficult space to gain new clients from well-endowed rivals.

Mr Frazis said a key point of differentiation for the BoQ Group is its focus on specialty businesses, where small business owners run branches that have in-depth knowledge of certain industries, such as medicine and healthcare.

While he recognizes that price is “a factor” in attracting new customers, he said branch network growth is a key pillar of BoQ’s strategy to improve customer experience through face-to-face contact. face.

Evans and Partners banking analyst Matt Wilson said he was not convinced by the growth-by-acquisition approach, but supported the focus on branches.

“I much prefer an organic growth option,” Wilson said. “But the opportunity he has is that ME Bank doesn’t have branches. So, opening a few ME brand branches in Victoria could work very well, especially in the context of branch closures by the majors.

“With mortgages… people need to watch someone. The zoom might be fantastic, but at the end of the day we’re all fed up and we’re all social creatures. “

The buyout comes at an important time in BoQ’s digital transformation, which involves a five-year, $ 440 million technology overhaul that will shift all of the group’s customers and staff to using a single platform based on the cloud.

When completed, all three brands – BoQ, Virgin Money and ME Bank – will use the same main banking system Temenos T24, which Mr Frazis said would allow all customers access to the bank’s 166 branches in major cities. and regional areas.

Mr Frazis said the group’s technology overhaul was a key advantage over majors that grapple with legacy IT systems and aging technology that have created systemic compliance issues.

“We are not repairing any of our old technologies. We have built an end-to-end digital bank in the cloud, ”he said. “When you try to fix old systems, there are always problems. It always takes longer and it always costs more.

“The big banks, due to the complexity of their business, have no choice but to opt for a new platform. “

However, Wilson questioned those ambitions, saying he believed the technology overhaul was “more complex than it looks” and that the merged entity is still “far from being a real one. digital bank “.

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