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As part of its Covid-19 response strategy, National Australia Bank (NAB) has cut funding to its “change bank” portfolio, a decision that has seen around 100 projects die or be suspended.
The move is based on two goals, NAB chief executive Ross McEwan said in an email sent to all of the bank’s roughly 35,000 employees. First, it focuses on freeing up internal resources by reallocating employees from change projects to the desired roles needed in the permanent organization.
“We are inundated with questions and need to focus on what matters. Each of us must work to support customers in need, immediately. This is critical,” he wrote.
As a result, “Our most urgent priority is to assist our colleagues in contact centres, branches, merchant banking centres, NAB Assist, fulfilment, operations and other customer-facing roles who are inundated with customer enquiries.”
Second, by cutting about a hundred non-essential projects, National Australia Bank is saving on its huge bill for external consultants and contractors. NAB has increasingly turned to external experts for support in recent years, particularly to support the acceleration of its digital transformation and cost reduction agenda.
According to an analysis by Consultancy.com.au, NAB spent almost $300 million on the big four in the last decade alone, of which $200 million was related to audit services, the remainder was for non-audit advisory services and consulting support. Last year, the bank collaborated with McKinsey & Company, among others on risk culture audit.
Speaking of the move to cut back on external sources, McEwan wrote: “This decision is extremely difficult but necessary,” further showing some empathy for all those who have seen their incomes come to an abrupt end. “I apologize for that. I wish we didn’t have to take this action, but it’s the reality of the situation we’re faced with. We will treat them fairly, we plan to offer support beyond what is needed.”
However, around 20 projects deemed “key” to the bank’s future will continue. These projects are considered key and deal with corporate strategy, system resilience, digital access, credit provision and relief provision for frontline staff. One of them is a strategic planning review it is currently being worked on together with Bain & Company.
Last week, chief executive McEwan announced that NAB was set to close 70 under-utilised branches of its 730-strong network to be used as staff retraining facilities aimed at clearing the backlog of requests from customers desperate for help amid covid-19 disruption .
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