Future Innovation in Banking Sector of Australia

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The future innovation in the banking sector of Australia
Student Name
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Professor’s Name
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Table of Contents
The future innovation in the banking sector of Australia..........................................................3
Abstract.......................................................................................................................................3
Introduction................................................................................................................................3
The factors influencing innovation in the banking industry.....................................................4
Changing demographics............................................................................................................4
Changing technology..................................................................................................................5
Interventionist governments.....................................................................................................5
Asiafication factor......................................................................................................................5
Subdued macro economy...........................................................................................................6
The changing customer behaviour...........................................................................................6
NAB’s Technology Transformation.............................................................................................6
Developing innovative environments for the Oracle software into NAB system.....................8
Methodology...............................................................................................................................8
The use of questionnaires..........................................................................................................9
The SWOT analysis.................................................................................................................11
Findings........................................................................................................................................12
Strategies for implementing the Oracle software.....................................................................15
Conclusion....................................................................................................................................16

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Recommendations........................................................................................................................16
References.....................................................................................................................................17

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The future innovation in the banking sector of Australia
Abstract
Banking is one of the major pillars that drive the economy of a country. The nations with
an efficient banking system have been reported to perform well in terms of business economics
and stand a better chance of economic growth than countries with poor banking systems. The
sector is the largest industry of the financial system of Australia as illustrated by (Nicholls and
Sharma, 2015, pp.252-264). Reports have indicated that it is made up of approximately 147
Authorized Deposit-taking Institutions (ADIs) which are reported to collectively hold nearly 55
per cent of the total assets of the financial institutions of Australia. There has been a renewed
debate about the reputation and culture revolving around the uncertainty of the breadth and scale
of the disruption in strategies of how the future of the banking industry will look like in
Australia. According to (Lodhia, 2015, pp.585-598), the most important questions to be
highlighted in these debates should focus on the state of the Australian banking today and how it
is changing. The way the industry should respond to these changes and the way it will look like
in the future and finally what the individual banks can do today in order to achieve productivity
in the new environment.
Introduction
This report is aimed at facilitating innovation in the banking industry of Australia. The
National Australia Bank (NAB) was selected to facilitate the implementation process of
innovation with the use of Oracle-based software. The National Australia Bank is known for its
services in the insurance unit, loans, accounts, and the credit cards services. The software will be
aimed at registering debit cards on the mobile phones to allow for faster and efficient
transactions of money. However, innovation goes hand in hand with the leadership styles that are

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anticipated to provide an enabling conducive environment that advocates for innovation (Fusch
and Patricia, 2015, pp.1408-1416). There could be other factors, which are potential drivers to
innovation such as the growth in customer demand, gaps in customer satisfaction, stiff
competition from the competitors in the same industry, and the availability of adequate
technology.
Research objective
The main objective of this research was to determine the suitable means that could
improve the banking services and reduce the time spend at the teller or in the banking hall. A
contactless banking approach with smartphones was to be examined to determine its
effectiveness and impact in the banking sector in future using the Oracle-based software.
The factors influencing innovation in the banking industry
The report by the Price Waters house Coopers (PWC) on the future of banking in Australia
outlined the six forces that are the core factors influencing innovation in the banking industry.
The forces outlined are, the changing customer demographics, consumer behaviour, technology,
Asian influence, the subdued global economy, and the influence of the government. The report
indicated that these forces are driving the change at a precise time when the traditional industry
drivers such as asset growth and advantage are claimed to be diminishing and may be reversed in
future (Alalwan et al., 2017, pp.99-110).
For a continued economic growth and profit for the stakeholders, the banks should be
smaller, simpler, and most importantly be customer oriented than they have been in the past
years. In order to achieve this, the report proposed six approaches that the banks in Australia
should incorporate in their operations. These include: to explicitly organize the operations

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around the clients, simplify the face, voice, and offers by the banks, to embrace implemented
regulations, to put a positive work culture to work, to focus on specific areas of innovation, and
finally to optimize the organisation’s footprint throughout the value chain (Banks et al., 2015).
These factors were presented in the pie chart below with the magnitude of their influences.
Changing demographics
16%
Changing technology
12%
Interventionist
governments
18%
Asiafication factors
14%
Subdued macro economy
13%
Changing customer
behaviour
23%
Others
4%
Factors influencing innovation in the banking industry
Changing demographics
The Australian population is becoming more diverse, older, richer, and increasingly
urbanised while becoming more interconnected not only with the country but also overseas. This
led to increase in the number of customers using the banking services that have intensified the
number of daily transactions thus, calling for the upgrade of the existing systems. In addition, the
wealthiest group in the history of Australian banking services transfers assets to the most
indebted groups, which require the bank to quickly reflect the changes in the financial
circumstances for specific customers (Honka et al., 2017, pp. 611-646). This has put pressure on
the field of innovation to quickly device measures to cater for the demographic factors.