Police Bank is taking a “leap into the future” as it moves through its whole of bank transformation which will see its technology stack completely overhauled to lead the bank into the digital age.
Joining the iTnews Podcast, Police Bank CEO Greg McKenna said technology is a subset of the bank's ongoing transformation, which has been underway over the past few years.
“Since 2020- 2021, we've been changing a lot of things about the bank. One of the critical pieces of those changes is the enablement that a new tech stack will give us," he said.
“What we're working on at the moment - and we're probably right in the middle of the technological transformation, or phase one at least anyway - [is] we are in the process of replacing our core banking system, and moving from one vendor to Temenos T24 stack.”
McKenna said Police Bank will then integrate “a new loan origination system, new onboarding, internet banking, card management services, document management services [and] a whole host of ancillary services that go to being a modern mutual bank”.
The bank has targeted a “go-live” for around “February, March next year with [potentially] some slippage” into later months.
McKenna said customers, which include police personnel across Australia, have “to be paramount in everything we do”, especially since they are “pretty technologically savvy”.
“We needed to modernise what we had - what we had was pretty clunky or is pretty clunky," McKenna said.
"A lot of that is because of just what we've built up over the years.
"What we needed to do was make it easier, take out the pain points and the friction points from both my team being able to serve the members but also the members accessing us.”
From here the bank is taking an omnichannel approach where members can interact with Police Bank via online channels before picking the conversation back up within a branch.
He said the current experience customers face is “slow and paper-based” with many processes similar to “banking 20 years ago”.
"A leap to the future"
McKenna said transformation was identified as a key priority as far back as 2018 with a technology strategy to augment the overall bank strategy put into play in 2020.
Calling its transformation a “leap to the future”, McKenna added that Covid-19 had highlighted need for organisations to take a digital approach.
He saw the Commonwealth Bank, in particular, as a “benchmark.”
“It's the biggest bank in the country. They built this fantastic ecosystem. Their apps pretty cool. They're relatively easy to deal with. And while [an organisation] like Police Bank can never be the CBA, we just don't have those resources - what we do have to offer is a compelling, technological offer to our members and our target audience for our members, so that they want to deal with us and stay with us - That's been the main driver," McKenna said.
“It is going to be a huge leap forward. I know my team is really excited about getting to day one in 2024 of what the new world looks like.”
He added neobanks such as Up, UBank (formerly 86 400) and others, which attract younger demographics, stress the importance of a digital-first approach with ease of onboarding and conducting basic banking tasks.
“If I look at the statistics each month, it's younger members who are joining us. That's the target of the transformation in a big way is that you've got to be able to bank with us on your phone," McKenna said.
Police Bank, he said, must balance that out with what its older members, which is “a big chunk of the challenge”.
McKenna said the bank’s journey is unlikely to truly end, but that the largest “chunk” of the transformation, “at least what we can foresee on a five or 10-year time horizon”, will take place over the next 12 months.
“Sometime probably around June or July, our new core banking system is going to be sitting there, tested and ready to go to plug in all the ancillary services."
Over the following nine months the bank will work to build out capabilities like onboarding and loan originations, leading into the completion of phase one around February or March next year.
“Then it'll be about phase two, which is to use data better, to use open banking in a more full-some way to offer benefits to our members to ensure that our mobile app is optimised for what members want, to use behavioural insights so we can help members pay off their home loan sooner, save more money, those kinds of things.”
Finding the right core banking platform
McKenna said Temenos was selected after "a full RFP process".
"We were looking for a really solid and stable core," he said.
"If you think about what a core banking system is at its essence, it's a ledger. We wanted a really solid and stable and modern core that we could then plug in the services or the offering that we wanted.
“Temenos has got a really big ecosystem of providers who are already integrated with the core, so we can, in many ways, pick off-the-shelf.”
He said even if there’s a new move to a new product, the bank can use the Temenos APIs to integrate with the core, making the platform the right choice.
McKenna said gathering the right people in one room and planning “has been a boon in terms of moving this project forward”
“We're lucky in that sense because we were able to piggyback on a lot of the work that Temenos had done with Virgin Money. What we've done to simplify things for us is we've taken an adopt, not adapt approach to the core," he said.
“We took the Temenos way of approaching things and then we made the adjustment to our standard operating procedures as a consequence.
"We have largely adopted what they have in the model bank. I think that is one of the critical pieces of how it's been a much smoother ride than if we'd had to build from scratch and configure the core on our own.”
Looking to AI
McKenna said he “cannot wait” to see where technologies like generative AI will impact the bank as “ the use cases are going to be amazing in terms of helping members”.
“I think the things that we'll use it for at some point in the future would be to embed it in our own website so that members can ask questions," he said.
“I think that as we move forward, it's going to answer a lot of questions that just pop up from time to time, and it'll really help in contact centres and things like that.
"When somebody asks a question, we'll be able to give that extra level of help because it might be on the weekend or late at night and the IT department's not there, but the member might ask a question and we can answer it for them in a relatively succinct and timely manner.
“If it's optimised in the right way, there'll be genuine high level knowledge transfer which will really help the inquirer. I can't wait till it's more stable and we can all play with it”.
