NAB – Page 18 – Digital Finance Analytics (DFA) Blog

NAB appoints independent customer advocate

National Australia Bank (NAB) today announced it has appointed Catherine Wolthuizen as independent customer advocate to support its retail and small business customers in resolving serious complaints.

The Customer Advocate-Banking role has been established as part of NAB’s commitment to the Australian Banking Association (ABA) industry initiatives to make banking easier and more transparent for our customers and to strengthen and build independence into our complaints process.

NAB Chief Executive Officer Andrew Thorburn said: “We are committed to making it easier for our customers to do business with us. We want to give them confidence that when we get it wrong, we will do the right thing, and resolve and remediate their issues quickly.

“The role will also give our retail and small business customers an independent and stronger voice. It will support them through the resolution of complaints, which can be a difficult time for some customers.

“The Customer Advocate will also hold us to account and play a part in ensuring our complaints process is robust, transparent and efficient. This will help us to get it right the first time for our customers and give them a greater experience.

“Catherine’s extensive consumer advocacy skills and experience in the financial sector makes her a great candidate to take on this role. We look forward to her contribution”.

The role and scope has been verified by an independent third party and specialist in governance and independence activities, the Ethics Centre, to ensure there are no conflicts of interest and from a customer’s perspective that the role will be effective and independent.

The Office of the Customer Advocate will report to the Group Executive, Governance and Reputation and NAB’s Executive Leadership team and will commence operation in August 2016.

NAB Wealth also has an independent customer advocate for its wealth advice complaints process, which was put in place in May 2015.

NAB’s customer service teams remain a customer’s first point of contact for raising complaints or providing feedback.

About Catherine Wolthuizen

Catherine Wolthuizen has over 15 years’ experience representing the interests of consumers, in Australia and overseas. She is a previous chair of the Consumers’ Federation of Australia, the national representative body for consumer organisations, and a former board member of the Insurance Ombudsman Service.

From 2001-2005, she was a member of a number of consumer advisory panels, advising authorities including the Australian Securities and Investments Commission, the Australian Competition and Consumer Commission and Consumer Affairs Victoria. She led financial services policy for consumer organisation Choice between 2001-2005.

Ms Wolthuizen is a former chief executive of charities Public Concern at Work, Fair Trials International and the Consumer Law Centre Victoria. In 2012, Ms Wolthuizen was appointed an Ombudsman to the UK Financial Ombudsman Service, before becoming Head of Market Affairs. She is a previous member of the independent UK consumer advisory panel to the Legal Services Board, and helped create the Financial Conduct Authority’s Money Advice Service to increase financial capability amongst British consumers.

New instant card feature for NAB Pay

NAB customers can now continue using their personal Visa credit cards through NAB Pay within minutes of a replacement card being issued if their card has been lost or stolen.

This new instant card feature means customers who have NAB Pay on their compatible Android device can keep paying with their replacement card, without having to wait days for their physical card to arrive in the mail.

Customers who need to arrange a replacement card can call NAB and will be able to link to their new card in their NAB Pay digital wallet, making it immediately available to use.

An additional six NAB Visa credit cards will also be added to NAB Pay from today, which means all personal NAB Visa credit cards can be used on NAB Pay.

Independent research recently undertaken by global intelligence and digital media provider RFi Group showed that banks are the most trusted provider of mobile payments, with almost 80 per cent of consumers saying they would most trust their main bank to provide them with a mobile payment service.

Launched in January, NAB Pay is rapidly being adopted by customers, with more than 225,000 debit and credit transactions made through the app in the last six months.

NAB is the first Australian bank to utilise Visa Token Service in Australia, providing an important extra layer of security for customers.

Tokenisation replaces a customer’s credit card number with a unique digital ‘token’ that can be used for digital payments, without revealing sensitive account information.

NAB Pay is available as part of the NAB Mobile Internet Banking App on compatible Android devices, and can be used wherever contactless payments are accepted.

NAB Business Survey continues to show an unwavering non-mining recovery

This month’s NAB Business Survey remains true to theme of ongoing recovery in the non-mining economy, building on the already solid growth seen in the recent National Accounts. Services continue to lead the way, now including distributional services such as retail, while manufacturing has pulled back and mining (and related sectors) still look weak. Overall, this outcome suggests that economic activity is holding up reasonably well, with the RBA more focussed on the inflation outlook – encouragingly, inflation indicators in the Survey picked-up a little this month. Financial markets have priced in another 25bp cut by year end, but without a very weak CPI result for Q2 and/or a markedly higher AUD, non-mining activity strength, together with financial stability concerns of even lower rates, are, on balance more likely to keep the RBA on hold.

The Q1 National Accounts confirmed the positive trend seen in the NAB Business Survey for non-mining business activity, with a notable contribution to growth coming from the service sectors. The story was much the same in May, with firms continuing to point to a favourable business environment, despite a further slip in business confidence. Business conditions remained at a very elevated level (unchanged from last month), as a notable improvement in trading conditions (sales) and profitability offset a disappointing moderation in employment demand – consistent with more moderate rates of employment growth in recent months.

According to Alan Oster, NAB’s Chief Economist, “the Survey is suggesting further improvement for the non-mining sectors going into Q2, with some evidence that growth is becoming more broad-based”. Overall business conditions were unchanged at +10 index points in May, which is well above the long-run average of +5. In regard to the makeup of conditions, Mr Oster noted that “there is no doubt that things have remained strong on the activity side, but firms continue to be relatively restrained in terms of their demand for labour”.

Evidence in the Survey of a broader based non-mining recovery has been mixed, but most industries did record an improvement in business conditions for May. “Service industries continue to lead the way, which now includes distributional services such as retail, but mining and construction remain quite weak, which is partly a reflection of the ongoing downturn in spending on resource projects” said Mr Oster.

Despite elevated business conditions, firms are reporting slightly lower levels of confidence. The confidence index eased 2 points to +3 index points in May, pushing the index further below its long-run average. According to Mr Oster, “the RBA’s cut to interest rates did not help lift business confidence as we had hoped, even as sales activity continues to improve”. He goes on to say that “uncertainty around the upcoming election might be a factor here, but mixed results across industries suggest that other factors are at play”.

Leading indicators from the Survey are looking reasonably good, with forward orders remaining in positive territory and spare capacity declining. “Given the very weak signals on investment intentions coming from elsewhere, we are encouraged to see that the positive trend in capacity utilisation rates has continued”, said Mr Oster. “Firms are more likely to go out and invest or hire more workers if they see that their spare capacity is shrinking”, according to Mr Oster. Indeed, firms indicated an increase in capital expenditure in this month’s Survey.

Overall, these survey results give us confidence in our near-term view of the economic outlook, which sees the nonmining recovery remaining on track. With activity indicators staying resilient, the RBA is likely to be more focused on the inflation outlook – encouragingly, inflation indicators in the Survey picked-up a little this month.

Consequently, the next “live” RBA meeting is not expected until after the next CPI read in late July. Financial markets have priced in another 25bp cut by November, but without a very weak CPI result for Q2, positive activity trends are likely to keep the RBA on hold.

See the full report for details. NAB Monthly Business Survey – May 2016 (PDF, 170kb)

Queenslanders get access to ‘good money’ for the first time

NAB says two new innovative Good Money community finance stores will respond to the increasing need for access to fair and affordable financial services for Queenslanders on low incomes.

The Queensland Government is supporting the Good Money stores which will be in Cairns and on the Gold Coast. The stores are a three-way partnership involving financial inclusion organisation, Good Shepherd Microfinance, the National Australia Bank (NAB) and the Queensland Government.

Adam Mooney, Chief Executive Officer of Good Shepherd Microfinance said that he was excited to see the expansion of Good Money to a third state – building on the existing three stores in Victoria and one in South Australia.

“Good Money provides access to the award-winning No Interest Loan Scheme (NILS) which provides small loans upto $1,200 for essential goods and services such as fridges, washing machines or car repairs,” said Mr Mooney.

“We’ve been experiencing increasing enquiries from Queenslanders for our services and these two new stores will strengthen the footprint of NILS across the state, complementing the work of the Queensland NILS network which has a presence in around 115 locations.

“The financial conversations our microfinance workers have with clients positively builds confidence and focuses on the best options available. More than 90 per cent of clients feel they’re better able to budget after speaking with Good Money, and 50 per cent of clients who had previously used high cost payday loans said they’d avoid them in the future.

“The Queensland Government is showing national leadership in investing in financial inclusion to build community and family resilience. This is a wonderful new initiative as part of the Queensland Government’s commitment to its Financial Inclusion Action Plan, announced on Thursday this week,” he said.

NAB, a key partner in the development of the Good Money model first introduced in 2012, has committed $130 million in loan capital to microfinance programs nationally.

Michaela Healey, Group Executive – Governance and Reputation at NAB said the bank had a long history of contributing skills, expertise and resources to improving financial inclusion in Australia.

“NAB is committed to financial inclusion – but we realise we can do so much more when we work together with others. Good Money is a great example of what can be achieved when a bank, government and community organisation make a long-term commitment and come to the table with an open mind and a willingness to work together,” said Ms Healey.

“Over the past 11 years NAB has provided more than 138,000 products to help more than 421,000 low-income Australians access appropriate and affordable financial services. The extension of Good Money stores into Queensland is an exciting development that will make the stores’ vital products and services readily accessible to Queenslanders for the first time,” she said.

Communities Minister Shannon Fentiman said battling financial distress can take a heavy toll on health and relationships.

“Quite often people seek solutions that land them even deeper in debt,” she said.

“These stores will provide real alternatives to unscrupulous payday lender and rent-to-buy schemes to make sure people don’t spiral into debt – especially women, who are the fastest growing demographic accessing payday loans,” said Minister Fentiman.

The Good Money stores will offer the following services:

No Interest Loan Scheme (NILS) – Loans of between $300 – $1,200 for essential goods and services such as fridges, washing machines or education expenses
StepUP Loans – Low interest loans of between $800 – $3,000 with no fees and affordable repayment periods
AddsUP – A matched savings plan of up to $500 offered to people who have successfully repaid a NILS or StepUP loan
Affordable insurance – Simple car and contents insurance with flexible payment options
Referrals to other services – Such as financial counselling which provides information and support to assist people in financial difficulty

It is envisaged that the stores will open for business in 2017.

Good Shepherd Microfinance’s national NILS program is also offered through local community organisations in 115 sites across Queensland.

ASIC commences civil penalty proceedings against National Australia Bank for BBSW conduct

ASIC has today commenced legal proceedings in the Federal Court in Melbourne against National Australia Bank (NAB) for unconscionable conduct and market manipulation in relation to NAB’s involvement in setting the bank bill swap reference rate (BBSW) in the period 8 June 2010 to 24 December 2012.

The BBSW is the primary interest rate benchmark used in Australian financial markets, administered by the Australian Financial Markets Association (AFMA). On 27 September 2013, AFMA changed the method by which the BBSW is calculated. The conduct that the proceedings relate to occurred before the change in methodology.

It is alleged that NAB traded in a manner that was unconscionable and intended to create an artificial price for bank bills on 50 occasions during the period of 8 June 2010 and 24 December 2012.

ASIC alleges that on these days NAB had a large number of products which were priced or valued off BBSW and that it traded in the bank bill market with the intention of moving the BBSW higher or lower. ASIC alleges that NAB was seeking to maximise its profit or minimise its loss to the detriment of those holding opposite positions to NAB’s.

ASIC is seeking declarations that NAB contravened s12CA, s12CB, the former s12CC, s12DA, s12DB and s12DF of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act), s912A(1), s1041A and s1041H of the Corporations Act 2001 (Cth) (Corporations Act).

Further, ASIC has sought from the court pecuniary penalties against NAB and an order requiring NAB to implement a compliance program.

ASIC will be making no further comment at this time.

National Australia Bank Group Chief Risk Officer David Gall today issued the following statement:

“Trust in the integrity of our financial markets is crucial to a strong Australian economy. A fair, well-functioning and competitive financial system is crucial to providing the best outcome for customers and the wider community.

“NAB takes its role in upholding high standards of professional conduct seriously. We are committed to service, integrity and ethics and our values reflect this.

“Following an industry-wide review by the Australian Securities and Investments Commission into participants in the Bank Bill Swap Rate (BBSW) market, ASIC has today filed a claim against NAB making a number of allegations including market manipulation and unconscionable conduct.

“These allegations relate to trading in the BBSW market during the period 8 June 2010 to 24 December 2012.

“NAB has fully co-operated with ASIC’s review and takes these allegations seriously. We do not agree with ASIC’s claims which means they will now be settled by a court process.

“As part of ASIC’s investigation NAB has provided emails, instant chat messages and telephone conversations involving our employees. NAB retains this information as part of our business processes.

“We remain committed to serving our customers and ensuring our people demonstrate the values and behaviours the community expects of us.

“As this matter is now before the court, it is not appropriate to comment further,” Mr Gall said.

Background

On 4 March 2016, ASIC commenced legal proceedings in the Federal Court against the Australia and New Zealand Banking Group Limited (ANZ) (refer: 16-060MR).

On 5 April 2016, , ASIC commenced legal proceedings in the Federal Court against the Westpac Banking Corporation (Westpac) (refer: 16-110MR)

Prior to filing against ANZ and Westpac, ASIC’s investigations into misconduct in the BBSW has seen ASIC accept enforceable undertakings from UBS-AG, BNP Paribas and the Royal Bank of Scotland (refer: 13-366MR, 14-014MR, 14-169MR). The institutions also made voluntary contributions totaling $3.6 million to fund independent financial literacy projects in Australia.

In July 2015, ASIC published Report 440, which addresses the potential manipulation of financial benchmarks and related conduct issues.

Younger Investors Are Saving More

Young Australians are getting serious about saving and plan to increase their levels of investment in the coming months, the latest MLC Wealth Sentiment Survey shows.

The quarterly survey of over 2,000 Australians found that 42 per cent of 18 – 29 year olds added to their savings in the last three months, compared to 29 per cent of people aged 30-49, and 21 per cent of the over 50’s. Younger investors are also more likely than any other age group to invest more in the next quarter.

While young investors are demonstrating optimism, older people are taking a more conservative approach – with debt consolidation and superannuation the main priorities. On balance, Australians added more to their superannuation (+2 per cent) and paid down more of their debts (+6 per cent) in the last quarter.

The survey found that the retirement savings gap is still a looming concern for many Australians, who now expect to retire with just over $450,000 on average – down from $501,000 last quarter. Men, on average, expect to retire with $192,000 more than women.

MLC General Manager Corporate Super Lara Bourguignon believes the focus on building super and reducing debt is a positive sign.

”We can see that Australians are taking action to contribute more to their super to address their concerns about how much money they will retire with.

”While we are moving in the right direction, it’s also important for people to consider long-term investment options to help maximise their retirement savings.

”Our research found that over 40 per cent of Australians have never used a financial planner and don’t have a financial plan, so there is more work to be done to ensure that Australians are adequately prepared for their later years,” said Bourguignon.

The survey includes results from MLC’s Investment Intentions Index, which measures whether Australians are planning to invest more or less in the next three months.

While overall investment intentions improved this quarter, rising three points to -5 points, the number of investors who are planning to cut back the amount they invest still outweighs those planning to invest more.

Additional findings include:

In the past three months, one in four Australians have added to their savings and deposits, whilst one in five have elected to pay off debt.
Almost one in three women believe they’ll have ”far from enough” to retire on, compared to one in five men.
Fifty-six per cent of women don’t think they will have enough to retire on and live to their desired standard, compared to 46 per cent of men.
One in five of us expect to have less than $100,000 in savings when we retire – which may explain why almost one in five of us also plan to keep working into our 70’s.
One in five young Australians expect to retire before 60, compared to less than one in ten of those over the age of 50.
Significantly more men (43 per cent) believe they are holding more super than their partners. Just 14 per cent of women believe they hold more super than their partners.
Around one in five ”don’t know” how much they’ll have in retirement

QuickBiz – Proof of the Pudding

National Australia Bank has entered the online SME lending market with the launch of the NAB QuickBiz Loan, which that allows customers to borrow up to $50,000 in unsecured funding via a new online application process.

Developed by NAB’s in-house innovation hub, NAB Labs, the online platform uses financial technology to assist with the loan application process and states that customers will have money in their account within three days of NAB receiving their signed loan document.

The QuickBiz Loan carries a fixed interest rate of 13.85% for terms of either one or two years. The loan is repaid by monthly principal and interest payments and there are no application or ongoing fees.

According to Angela Mentis, NAB group executive for business banking, “in the early days of business ownership, small businesses often only require small amounts of funding – and many owners don’t have a property or other significant assets to secure a loan against. We’re responding to these customer needs, placing more emphasis on the strength of the business rather than traditional physical bricks and mortar security.”

Jonathan Davey, executive general manager of NAB Labs added the NAB QuickBiz Loan is “another example of the bank’s agile approach to meet customer needs”.

Meanwhile, Canstar’s research manager Mitchell Watson says “from NAB’s point of view this is a move to help stem any loss of low-risk customers to smaller, more agile competitors.”

According to Watson, “the advertised 13.85 percent does seem to be a fair interest rate”, given it is lower than the 16% being charged by the Commonwealth Bank’s Simple Business Overdraft. However, it should be noted that an overdraft is a more flexible and expensive loan product than a principal and interest loan.

What this means for your business

QuickBiz Loans are unsecured, although borrowers should enquire about whether personal guarantees are required. They should also check to ensure the 13.85% rate is based on the outstanding balance rather than the original limit. Any discrepancy would have been evident had the NAB website quoted the interest rate on an APR (annualised percentage rate) basis. Borrowers should also be aware that they could be up for costs if for whatever reason they terminate the loan before the expiry date.

An interest rate of 13.85% is at the lower end of the rates charged by the new breed of online lenders. Banks will always be able to offer cheaper loans to customers because of their lower cost of funds but while it is important, price is not the only factor SMEs consider when it comes to borrowing.

The biggest attraction of the online lenders is the ease of doing business and although there is little doubt that banks can develop software and systems at least as good as the online SME lenders, none of them will survive in this increasingly crowded marketplace if they fail to deliver on the commitments made on their website.

NAB says the QuickBiz loan product is launching in early June, although the website has already been up for several days. In fact, four days ago I applied for a QuickBiz Loan and the experience has been insightful in that the process is not automated, as it is with true online lenders where your application is made totally online. Rather this was an online enquiry. In addition it has not been quick. Having submitted answers to several basic questions about my identity and existing relationship with NAB, I then received the following message in an automatically generated email:

“Thank you for your enquiry regarding the NAB QuickBiz Loan.

“We are currently reviewing the information you provided us and we’ll be in touch shortly to discuss your application further.”

Four days later there has been no response. Of course there are always teething problems in implementing new ways of doing business but this experience re-enforces the importance of good execution. Banks have lots of great products and ideas but too often their execution lets them down.

If the big banks really get their act together with online SME lending, it’s going to be tough for the new little guys to compete. But this remains a big “if” and in the meantime the new players are backing their ability to do better on product and service delivery.

However this unfolds, we are finally starting to see genuine competition in the SME lending market and that’s a great thing for those SMEs who for years have been missing out.

Author: Neil Slonim who is the founder of theBankDoctor.org, a not-for-profit online resource centre that helps business owners deal with the challenges of funding their business. Reproduced from SmartCompany with permission.

NAB & Telstra create digital business marketplace for small business

Small businesses around Australia will soon be able to develop and grow through a new digital marketplace called Proquo; a start-up joint venture between NAB and Telstra.

Proquo will offer more than two million Australian small businesses an online platform to network, trade or swap services with each other.

Small businesses will be able source a range of services from other providers, create briefs for the work they need, exchange quotes, manage payments and publish reviews all on the one simple platform.

Proquo is a modern interpretation of the phrase quid pro quo (meaning ‘this for that’) and offers users the unique ability to swap or exchange their skills or services in addition to traditional monetary payments.

Proquo was developed by NAB’s innovation hub, NAB Labs and Telstra’s Gurrowa Innovation Lab. While it is a 50/50 joint venture, it will operate as an independent entity.

NAB Executive General Manager Micro and Small Business Leigh O’Neill said NAB was continually looking at ways to support Australian businesses and to make it easier for them to build their business.

“Small business is the backbone of the Australian economy; around 97% of all Australian businesses are small businesses and they provide a huge economic contribution to Australia’s current and future prosperity,” Ms O’Neill said.

“Small business owners tell us they are continually looking for new ways to do business and we think Proquo will provide them with a unique way to network and grow their business.

“Strategic partnerships like this one with Telstra, to combine the capabilities of two of Australia’s biggest companies, creates a really innovative business option for the small business community,” Ms O’Neill said.

Telstra Group Managing Director Telstra Business, Andy Ellis said Telstra supports more than 1 million businesses across the country with technology solutions so they can focus on running their business; and believes Proquo will offer them a new and innovative way to network and help their business thrive.

“Small businesses often struggle to get off the ground and our research shows that the exchanging of services will be a great advantage to many start-ups.

“We’re excited and proud to partner with NAB to offer this unique digital platform. This joint venture further highlights our commitment to small business so they can run, develop and grow their business,” said Mr Ellis.
Proquo will begin a pilot phase in June, with a full launch expected in July 2016.

Fast finance with new online NAB QuickBiz Loan

National Australia Bank (NAB) today announced it will introduce a new $50,000 unsecured business loan for Australian small businesses.

The NAB QuickBiz Loan, which has been developed by in-house innovation hub NAB Labs and will launch in early June, allows eligible customers to apply for up to $50,000 in funding via a new online application process.
The new online platform uses NAB’s Application Programming Interface (API) technology to assist with the credit check on the customer’s application and provide an automated credit decision within minutes. Customers will have finance for their business account within three days of NAB receiving their signed loan document.

NAB Group Executive Business Banking Angela Mentis said: “The Australian economy relies on entrepreneurs who innovate, establish new industries and create jobs. As the biggest business bank in the country, we stand ready to back Australian businesses with great ideas, providing simple, quick funding solutions to support small businesses looking to grow”.

New NAB research shows around 1 in 3 Australians would like to run their own business with young Australians clearly the most aspirational (nearly 1 in 2) and this offer will help businesses in those early years with the important cash flow they may need.

The research also showed that banking support (49%) is still commonly cited as a critical element to building businesses.

“In the early days of business ownership, small businesses often only require small amounts of funding – and many owners don’t have a property or other significant assets to secure a loan against. We’re responding to these customer needs, placing more emphasis on the strength of the business rather than traditional physical bricks and mortar security,” Ms Mentis said.

The initiative means NAB is the only big four bank to offer such an online service without a third party referral involved.

Executive General Manager NAB Labs, Jonathan Davey, said the NAB QuickBiz Loan was another example of the bank’s agile approach to meet customer needs.

“We are listening to our customers and focusing on the development of capabilities to drive better customer experiences,” Mr Davey said.

“It’s another example of NAB Labs agile development and rapid prototyping approach, where we build to decide, rather than decide to build, delivering solutions that make a real difference for our customers.”