Westpac is embedding AI into core “flows” or parts of its operations, with the technology set to be part of its mobile and online banking offerings by the first quarter of FY27.
Luis Uguina.
The bank has even bigger ambitions when it comes to artificial intelligence, wanting to build “personalised agents” that can help customers achieve their financial goals.
A consumer division presentation on Thursday saw one of the bank’s key recent hires – ex-Macquarie and now Westpac consumer’s general manager of data, digital and AI Luis Uguina – take the stage and outline his first six months at the institution.
Westpac is in the process of transforming its backend (Unite), frontend (digital-first) and how it executes change ‘Catalyst’.
Most of the focus Thursday was on the digital-first service model, where digital “will become our primary experience, not just a channel,” consumer division CEO Carolyn McCann said.
McCann said that “70 percent of the things that you can do in a branch, you can do on the [Westpac] app”.
Westpac thinks it can offer both better personalised customer service digitally, and at a much lower cost.
Broadly, the digital cost-to-serve is “65 percent lower,” Uguina said.
“Today, every three in four simple sales are executed digitally, and these numbers are growing eight percent month on month,” he said.
On what Westpac called “simple sale”-type interactions, the cost to complete it in a branch is $500, versus “$200 in the call centre and close to zero on the app,” McCann said.
Data and AI has a central role to play in powering this digital-first service model.
Uguina said that role has shifted substantially in the space of a year.
“One year ago, before I joined Westpac, the focus was purely on digitalisation: mobile apps, online journeys and straight-through processing,” Uguina said.
“To be digital-first 1781177107, we now use digital, data and AI together to fundamentally improve how the bank works, and this is working for both the customers and the economics of our business.”
The bank wants to do three things “materially differently” using AI.
“First, make banking simpler and more intuitive for customers, [with] fewer steps, more relevance and more personalised interactions. This supports our strategy on deepening relationships, improved retention and increased customer lifetime value,” he said.
“Second, improve how we run the bank and lift productivity. That means better decisioning, more automation in our operations teams, and using AI in our servicing capabilities.
“And third, doing this in a way that is safe, well governed [that is] consistent with expectations [as a] regulated institution.”
Supporting these efforts is a data infrastructure layer, built on Snowflake and Azure, that broke cover back in November last year.
“The Intelligence Layer is a platform that will capture and process real time signals, events, and behavioural patterns from our customers,” Uguina said.
“We will use this information to generate insights, predictions and leads to support more personalised customer experience, and [to] provide our bankers with a single view of the customer in the assisted channels.
“We will also improve fraud detection, offer dynamic pricing, and make more connected decisions. Obviously this will help deliver more revenue per customer.”
Uguina said that the composite data picture gathered through the Intelligence Layer could, for example, “indicate that a customer is considering shifting into a different bank”.
“[From there], we will engage with them through the appropriate channel at the appropriate time with an appropriate savings offer.”
AI will enable an even deeper, and more proactive, level of personalisation. The only debate is when it will be handling some of the more critical customer-facing workflows.
At present, Westpac is shifting AI “beyond isolated use cases” to embedding it “into the core flows of the bank,” Uguina said.
“Servicing, lending, collections, contact centre, fraud, and employee workflows are the areas where we are reimagining the uses of AI,” he said, adding: “That’s where the real value sits.”
Under questioning, Uguina clarified that in “early probably Q1 FY27 we will start seeing AI capabilities embedded in the mobile app and online banking.”
The future of AI-enabled banking
Looking farther ahead, Uguina predicted that AI would be helping customers manage their finances and make decisions.
“We are also thinking about how we are going to be using AI to help customers,” he said.
“We have a vision that we will be able to deliver personalised agents that will basically take the customer [through] the proper financial analysis and will be able to take care of the finance of the customer in many different ways.”
Uguina suggested a model where “you tell the [AI] agent, ‘These are my long term goals, these are my expectations, this is how I want to manage the money etc,” and then the agent would go to work.
“We think that we can do really well generating capabilities that will keep our customers safe and fully-focused on making their financial life easier.”
McCann backed the view that AI would be a “gamechanger” in the consumer segment, and expressed an opinion that customer use of the tools would grow over time.
“At the moment I’d say it’s for information purposes. I think we’re some way away from customers trusting AI to move money around accounts,” she said.
“There’s no doubt though that that may come at some point in the future, and that may also disrupt the broking market.”
