National Australia Bank: Leveraging innovation to reinvent small business banking

By: The Digital Banker

The global SME landscape continues to face challenging post-pandemic operating conditions as high-inflation coupled with rising interest rates and trade flow disruption has resulted in a weaker outlook for world economies. This is a cause for concern as SMEs are a key contributor to job creation and therefore remain the core source of growth for most economies. In Australia, small businesses represent 98% of all businesses, employ an estimated 42% of Australians in the private sector workforce and account for ~33% of the country’s GDP.

For SME lenders there is an added pressure as new fintech entrants attempt to redefine customer engagement and are directly challenging incumbents in the acquisition and capture of SME wallet share - particularly those that comprise the small business segment.

Indeed, small businesses have long remained under-served and overlooked from a product and service standpoint and are now demanding bespoke, digital and data-rich solutions alongside tailored advice. Small businesses are also in that unique situation where access to specialist guidance and funding remains elusive and few institutions have effectively sought to bridge these longstanding gaps to ensure the longterm survivability and relationship of their small business customers. In contrast, Ana Marinkovic - Executive General Manager, Small Business at National Australia Bank, is passionate about small business and supporting them with a strong proposition, ‘Small Businesses are the lifeblood of our local communities and the largest employer in Australia. As a bank, we have a duty of care to continue to support this segment’s sustainability and growth. Our strategy of digital enablement powered by human touch in moments that matter will continue to support our entrepreneurs into the future’.

New products and processes for small businesses of today

It is within this backdrop that National Australia Bank (NAB) has proactively changed this paradigm by digitally innovating and operationally reshaping its business to better reflect changing market conditions and customer needs.

Over the past two years, NAB has made significant investments in new products and processes designed to specifically address the unique digital needs of small businesses, and in doing so setting itself apart from its peers;

• In Lending, NAB has introduced four key offerings including a fast tracked lending process that provides a simultaneous assessment of house and business equity within five days, QuickBiz Digital Business Lending facilitates access to unsecured loans and overdraft funds in less than an hour, Simple Home Loans offers digitised home lending for SME business owners and the NAB Green Lending Suite covers a range of business lending solutions to support business transition to net zero carbon.

• From a Merchant perspective, NAB Hive was launched to provide customers real time access to transactional data and servicing needs and NAB Easy Tap turns an Android device into a payment terminal

• NAB’s Deposits have made origination available to customers across digital channels and have removed paper deposit slips from their branches

The results have been game-changing for NAB with impressive growth across lending and revenue metrics, improved deposits market share amongst small business to establish clear market leadership at 22% and celebrated small business lending growth of 2.6x system in FY22.

Redefining the service model and digital experience for small businesses

A closer review of NAB’s digital transformation reveals the extent to which NAB has gone to enhance the customer journey of small businesses;

• NAB launched Small Business Explorer, allowing customers to select various products online that best suit their financial needs. Small Business Explorer is customer focused, helping to remove complexity from the process of understanding and choosing products and seamlessly linking the customer to an online application or quality conversation with a banker

• Banker Wizard empowers bankers to make faster, right first-time lending decisions

• NAB Small Business Hub is an online educational and resource hub for customers, providing support across a variety of content to help them grow their business

Furthermore, NAB deftly aligned its digital strategy with a service proposition that is differentiated to other majors in that;

• Local small business bankers look after both the business and personal needs of the customer

Ana Marinkovic Executive General Manager, Small Business at National Australia Bank

• The top ~30% of customers are provided with the direct contact details of a ‘Named Banker’ who support their financial needs

• Servicing leverages a centralised infrastructure to support 30,000 weekly customer enquiries.

Becoming the partner of choice for small business in Australia

As NAB Small Business continues to prove the efficacy of its strategic transformation and enrich the digital experience of its customers through well-developed propositions, it remains well placed to maintain its double-digit revenue growth for FY23 despite the prevailing economic conditions. Validating its achievements over the past year, The Digital Banker awarded National Australia Bank “Best Small Business BankAustralia” at the recently concluded Global SME Banking Innovation Awards 2023 program.