Newcastle Permanent's digital transformation to benefit customers

Changes will enable staff to 'walk the talk'

Newcastle Permanent's digital transformation to benefit customers

Customers stand to benefit the most from integration of back-office systems at Newcastle Permanent, the mutual building society has said.

Transformation of back-office operations started in March 2020.  Despite disruptions following the onset of COVID-19, which threatened to push out the completion time, the project was completed last May, on time and within budget.

The project integrated three separate initiatives across the company, into a digital solution. 

Mark Colless, chief financial officer at Newcastle Permanent, said the company first recognised the need for a back-office solution in November 2019.

Having focused on innovations to front-of-house functions that served its customers, the mutual set itself the challenge to improve its back-office operations.

“We had three separate initiatives across the organisation looking at financial management, procure to pay and human resource information systems,” Colless said.

“Rather than investing in disparate systems, we started investigating an integrated solution. This would give us an amazing collaboration opportunity internally and allow us to deliver the three projects, replace eight existing systems and build a solid foundation for future innovation and automation.”

The solution provided opportunities for the company to improve end-to-end customers. Its strategy was to adopt new processes and apply best practice over time, including processes tailored to meet customer needs.

Through a partnership with Australia-based software company TechnologyOne, Newcastle Permanent used its one banking software-as-a-service solution. 

During COVID-19, the health and safety of employees and customers within Newcastle Permanent’s retail branch network was a priority.

Employees able to work remotely were transitioned, allowing the company to support its customers, whether through digital banking, enabling contactless payments, or providing hardship support.

Newcastle Permanent financial systems manager Tristan Jones said technology and innovation accelerated during COVID-19, as shown by the pipeline of work completed to support its customers.

“The ability to work with a SaaS-based system was critical,” Jones said. “It meant it didn’t matter where we were or what device we were using. In fact, the stay-at-home orders meant that the Newcastle Permanent and TechnologyOne teams didn’t actually see each other again face-to-face after those first four days in March 2020 until after the implementation went live.”

Although not immediately transparent, its customers stood to benefit from improved processes.

“It has given us process maturity. Before, many of the processes in these areas operated in a ‘manual controls’ manner. Those controls were sufficient, but they were time-consuming and that made them difficult to scale. Now, our controls are systems based,” Jones said

Customers would also benefit from a shift in employee mindset.

“Our vision is to be Australia’s favourite banking experience,” Jones added. “However, before we implemented TechnologyOne, we were asking our people to think ‘digital first’ with customers and then asking them to pay suppliers with a paper invoice. We’re now walking the talk in the back-office too.”

TechnologyOne CEO Ed Chung said as many were reliant on technology systems on-site, the challenges encountered by Newcastle Permanent would be familiar to other non-major financial organisations.

“Competition in the market largely revolves around improving customer experience, reducing churn, or creating new revenue streams from existing customers,” Chung said. “So, investments in front-of-house solutions have grown rapidly but the opportunities in the back-office have had less attention.”

Economic analysis conducted by IBRS and Insight Economics found Australia’s financial and corporate sector could unlock billions of dollars by replacing old technology with cloud-based Software-as-a-Service systems (Saas).  It found cost of ownership savings were in the range of 4% to 19%, while labour force productivity improved by 5%.

It was in the interests of customers, staff, and shareholders to accelerate the digital transformation underway in the financial sector, as the opportunity was “too big to ignore”, Chung said.