Nationwide vows to keep branches open as it spends £1.3bn on digital growth
Nationwide has vowed not to be the second bank to fall victim to an IT disaster this year as it unveiled a £1.3bn technology upgrade today.
Chief executive Joe Garner said there would not be one “big bang” change as it moves to a new digital platform, adding that the investment won’t come at the expense of its high street branches, saying its number of branches would remain at around 650.
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Its digital outlay will take its overall investment plans to £4.1bn over the next five years, and will see the building society hire between 750 and 1,000 extra staff in a new technology hub.
“At a time when customer expectations of service are rapidly changing in a digital world, we are investing to ensure that we continue to provide leading service. We believe that our members want a combination of human service on the high street, as well as digital convenience,” said Garner.
Tony Prestedge, deputy chief executive at Nationwide, said the money would allow the bank to retire its legacy systems and introduce new revenue-driving services by 2023.
It will also allow Nationwide to augment in-branch services with video chats and social media, build a new digital platform to serve digital banking users, cut its number of data stores from 20 to two, invest in AI and analytics, and open its new technology hub.
He said the migration to the new digital platform would be staggered over two to three years to avoid the kind of issues that plagued TSB when owner Sabadell tried to shift customer records to its own platform from former owner Lloyds’ system earlier this year.
“We won’t allow a completion date to determine what that [migration] looks like and we’ll make sure we test and test,” he added.
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Nationwide previously migrated 5m customers over to SAP for Banking system back in 2013.
Garner said that branches would only be closed if they stood in close proximity to one another, crediting them with driving up the number of new current accounts by 38 per cent over the last five years to an all-time high of 7.3m.
“It’s not just about sales, it’s about service,” he added. “If they’re coming [to a branch] because they’ve received a suspicious email and they want to talk to someone then that’s a useful service the branch can offer.”