Preparing for the future
There is one certainty about the future. The pace of technological change will only accelerate. We are also facing significant changes on the regulatory front as government and industry consider new standards of practice for Australia’s banks. Organisations that value and foster resilience, agility and innovative thinking will be best positioned to navigate both the challenges and opportunities that accompany technological and regulatory change.
Keeping up with the accelerating pace of change also demands leadership that embraces strategies to build organisational resilience, which we understand to be the ability to quickly recover from setbacks and adapt well to change. This section explores how BOQ considers and is responding to a range of important technological and regulatory developments impacting our business.
Cyber security and customer data privacy
Cyber security has become a key operational risk for organisations across the globe. It is broadly acknowledged that cyber is a major threat to the protection of customer data and, ultimately, to the profitability and reputation of organisations. As we move to a new era in banking by harnessing technology to transform, lift efficiencies, and offer better services to our customers, we need to ensure we have an adequate control environment that can withstand the ever increasing cyber-attacks we are experiencing across the financial services sector in Australia.
We have taken steps to ensure BOQ is well positioned to operate effectively within an elevated cyber risk environment by strengthening our cyber security function in combination with our cyber security service providers. This means we have more control and visibility over how the business protects customer data and assets and, very importantly, have better flexibility and agility to ensure cyber security at BOQ evolves as cyber threats become more sophisticated. To support the protection of data, the cyber security team collaborates with industry-leading threat intelligence partners and other security teams from financial services organisations to keep abreast of trends related to cyber-criminal activities. Additionally, BOQ has established a new and enhanced governance framework ensuring that cyber related issues or risks are dealt with in an effective and efficient manner.
BOQ is also investing in automation and threat intelligence to implement more proactive methods of managing cyber threats. It is important to us that we prevent incidents from occurring in the first place, rather than managing incidents post-event.
Automation and robotics
BOQ is continuing to explore automation and robotics opportunities to support all areas across the bank. This function is tasked with improving productivity, efficiency and customer experience. BOQ is exploring Robotics Process Automation (RPA) and other solutions involving machine learning and artificial intelligence. We are already seeing the benefits from automation across our retail lending and risk processes, as well as throughout IT support and customer on-boarding.
BOQ’s digital strategy involves delivering value in the form of digital products, services and experiences through dynamic and evolving channels. To keep in step with the rapidly changing environment, innovation is a crucial capability for BOQ. In parallel, BOQ has conducted a number of proof of concepts over the past year, testing customer sentiment around automated savings, personalised digital communication and new product ideas. Design thinking and agile capabilities have also been a key focus with the development of an innovation toolkit and the facilitation of design sprints across many areas of the business.
In delivering digital transformation for BOQ, Virgin Money Australia (VMA) is embarking on building a digital bank of the future. Given the rapid speed of change and to better meet the needs and expectations of VMA’s target customer segments, investment is being made into a new customer proposition and technology solution to enable enhanced levels of growth over the coming years.
This year, a rigorous selection process was undertaken, including a 12 week proof of concept to select the technology partner of choice. Also, a proposition design stage including numerous rounds of customer testing was completed to better position the VMA brand and to support the launch of the new transaction and savings accounts.
Application Program Interface (API)
BOQ has continued to develop its internal and external API to support our digital transformation journey. API’s are the functionality that supports the way systems communicate with each other, both internally and externally.
This year saw new APIs created to allow internal integrations as well as the ability to connect externally to third parties. With Open Banking requirements being delivered over the course of 2020 and 2021, this will assist BOQ to embrace the change by ensuring we have the necessary capability to share and received data effortlessly.
Building partnerships and investing in fintech opportunities
Over the past 12 months, BOQ has continued to build out its partnership and collaboration approach to achieve better customer outcomes and test new propositions and technologies.
This year saw the establishment of a 12 month Entrepreneur in Residence program to bring in new capabilities. Partnerships in Queensland have continued to be fostered through two-way share opportunities with River City Labs, and expansion of the relationship with Queensland University of Technology (QUT) including the lease of new space at the Gardens Point campus in Brisbane and a partnership with QUT Creative Enterprise Australia (QUT CEA).
Through the QUT CEA partnership we launched our pilot program, BOQ #WITHSTARTUPS. This provided three start-ups with a dedicated BOQ relationship manager to support them in setting up banking facilities. We also provided mentorship to start-ups participating in the QUT CEA Collider Accelerator program.
Keeping abreast of domestic and international start-ups is key to understanding the changing landscape, with many connections being made locally and through our partnership with Plug and Play in Silicon Valley. Plug and Play is a start-up hub that attracts a large pool of start-ups across many industries. As a partner of Plug and Play, we have voting rights to determine who is selected to join their accelerator program, have access to their diverse cohort of start-ups, gain attendance at demo days, and can arrange deal flows and partnerships. BOQ is currently running a pilot for an innovative initiative with a start-up that was identified through Plug and Play.
In 2019, major banks in Australia became the first sector required to comply with the Consumer Data Right law and the transition to Open Banking. Open Banking is intended to reduce the barriers that currently prevent customers from switching between banks and will give customers more control over their information. Banks will be expected to provide open access to data on product terms and conditions and customer transaction use, and customers will have the ability to direct that their data be shared with other bank and non-bank service providers. Open Banking is designed to be customer focused, to encourage competition and create opportunities for new innovation in the sector.
Revisions to Open Banking implementation timelines were recently announced. Smaller banks like BOQ will now be provided with a consistent 12 month implementation extension, relative to the timeframes applied to the major banks. Under this new timeline, non-majors that do not elect to participate early will commence sharing consumer data on 1 February 2021.