While competitors are dipping their toes into the sector, this CEO isn't biting
The head of National Australia Bank isn’t keen on “banking as a service” – the practice of providing the systems and technology for other lenders to launch bank accounts and home loans – but the bank will continue to provide loans for other players under its own name.
Both Westpac and digital bank Volt are dipping into banking as a service, according to a report by The Australian. However, NAB CEO Ross McEwan said he didn’t want to enter the sector. However, he said NAB would continue to provide loans to other institutions under its own name – a practice known as white-labelling.
“I’d like to grow this bank without having to let others sit on my systems,” McEwan told The Australian. “I’d rather work them for ourselves for the next probably five to 10 years, but we’re using white-labelling to help.”
McEwan is currently overseeing the digitising of NAB’s banking and loan systems with the help of executive Angie Mentis, The Australian reported.
Westpac, meanwhile, is pushing ahead in the digital space both by simplifying its own systems and offering banking as a service. Westpac has forged a partnership with buy-now-pay-later company Afterpay, and this week the companies launched “Money by Afterpay,” a consumer banking app that gives Afterpay’s customers access to Westpac savings accounts.
Westpac is also providing banking services to other firms, including personal lender SocietyOne, The Australian reported.
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McEwan said he didn’t see NAB entering the banking-as-a-service space, but the bank will continue to provide loans for other institutions through its Advantedge unit and through its purchase of Citibank’s local retail operations.
“It comes in lots of different guises, and in the old days it used to be a white label – and now it’s called banking as a service, because you are using the underlying technology,” McEwan told The Australian. “We are in that [white label] market, we’re expanding into that market … but we won’t be using my systems to allow others to sit on the back end of all my technology and pieces.”
McEwan earned $5.29 million in total compensation for 2021 as NAB posted a 76.8% spike in cash profit.
