Outgoing Ubank CEO, Philippa Watson, joined a panel at the Australian Financial Review Banking Summit to discuss the critical decision to evolve Ubank’s technology infrastructure, a move she described as essential to staying competitive in a rapidly changing financial landscape.
The migration journey
Ms Watson said that modernising core banking systems is more than just a tech upgrade; it’s about rewiring the very DNA of banking to meet new demands and win loyal customers in an era where it has never been easier to switch banks.
Ms Watson, who joined NAB Group in 2020 to run the bank’s digital proposition, Ubank, said, “Pretty quickly we realised that we had a very fundamental switch out requirement across almost all our technology that was not suited to a fast-paced youth-oriented brand, which was where we wanted to take Ubank.”
She explained the decision to acquire the neobank 86 400 rather than build from the ground up.
“We ended up purchasing one of the more mature neobanks, 86 400, with a view to take technology infrastructure that was 80 per cent there and then build from that point.”
Youth-focused banking
Ms Watson also discussed the success of neobanks and the importance of scale in banking.
“If you look at the UK, that would be a market where we’re seeing extraordinary success from the banks that we might once have described as neobanks, and now actually they are massive digital banks which are really setting the standard for customers.”
She also emphasised the benefits of being part of a larger group.
“Ubank has benefited enormously from being under the umbrella of the NAB Group and being able to avail ourselves of some of the protections of a large organisation which invests hundreds of millions of dollars into customer safety can provide.”
Digital innovation and fintech partnerships
On the topic of digital innovation, Ms Watson spoke about Ubank’s partnerships with the fintech community.
“The Ubank environment is pretty special in that we have partnerships with dozens of fintechs that help us provide a modern environment to serve our customers,” she said.
However, she stressed the importance of assessing the long-term viability of these partners.
“One of the things that we look at really closely when onboarding a new partner whether that partner or provider is going be there in 5 years and 10 years and 15 years,” she said.
Rolling out new technologies at speed
Ubank recently became the first Australian bank to eliminate passwords in favour of passkeys, a move that enhances cybersecurity. Passkeys unites a customer’s trusted device and their biometrics to create a unique key, which enables access to the customer’s digital banking without the use of passwords.
Ms Watson said Ubank is focused on helping customers stay safe in an environment where scams are becoming more and more sophisticated.
She said that whilst it will take the community time to understand passkeys technology, Ubank has seen a 90 per cent uptake among its digitally active customers, who are now using passkeys as their preferred login method.
“We’re seeing passkeys used more and more across large tech companies, some government agencies are using it, and I think there are a number of banks that have indicated that that’s the direction that they’re going as well.”
