Macquarie’s Banking and Financial Services (BFS) technology chief Richard Heeley has signalled the group’s intention to make a “significant” investment in personalised banking in coming years, with ambitions to create Australia’s “leading omnichannel experience in financial services”.

“We see the future of banking as highly personalised,” Heeley said during Macquarie Group’s half-year results presentation on Tuesday.

“That means we’re going to consume every interaction that our customers make into our event-driven architecture, and we’re going to utilise those interactions from our customers to provide that best experience.”

Through this enhanced capability, the bank will be equipped to proactively predict a customer’s problem or need before they ever contact the bank, Heeley said, ensuring a solution can be found in an instant.

Australia’s fifth largest by market cap has tangibly backed its aspiration to be Australia’s “best technology company in financial services”, last year forming a dedicated digital, data, design and engineering team – known as D3E.

The team currently boasts more than 600 engineers, 380 data and 340 digital experts, and 55 dedicated designers, which, Heeley said, will continue to grow “as we build out our capabilities [in] technologies like ML and AI to improve operational efficiency”.

“The purpose of [this team] is to focus on our aspiration to be the best technology company in financial services, to provide better reliability for those services, and with the fastest levels of innovation.

“We constantly talk about recognising value prioritisation… and we don’t [want to] waste time and money on things that our customers haven’t asked for or business doesn’t need.”

Macquarie’s technology investments, which have more than tripled over the last 10 years to hit $677 million in FY2023, have “from the ground up” effectively transformed BFS’s underlying tech stack, Heely said, to function as a fully digital bank.

Today, upwards of 96 per cent of BFS applications are now in and have been rearchitected for cloud, with its SAP-backed core banking system also entirely cloud-based.

“Virtually every part of the stack has been reimaged and rebuilt for digital engagement,” Heeley said.

“[We did this] to ensure we have no legacy tech that is going to impair our speed and agility as a business, but also to ensure that we’re future fit and purpose-built to handle higher volumes while maintaining our performance into the future.

“Hopefully that will pay dividends.”

Macquarie eyes growing SME market

Technology – namely, its “centralised” loan originations platform developed by nCino and Pega – is also at the vanguard of BFS’s push to expand its still small share of Australia’s SME lending market.

Macquarie is a major player in Australia’s home loan and retail deposit markets. Its 5.3 per cent share of the mortgage pool, representing $118 billion today (up from just $12 billion a decade ago), is the country’s fifth-largest home loan book after the big four banks.

Collectively, the BFS group’s deposits sit at $135.6 billion (a crucial funding base for its loans), representing a 4.9 per cent market share.

However, its business banking footprint is notably smaller. Totalling $15.5 billion, it accounts for just 1.7 per cent of Australia’s business loan pool. Macquarie’s business deposits also sit at a relatively modest $22 billion, growing from $6 billion a decade ago.

According to Heeley, while still “early days”, its business loans platform has already improved its time-to-decision by 15 per cent whilst also removing a “significant” number of manual processes.

“What I’m hopeful for here is the origination work that we did in the personal bank, which was absolutely fundamental to the success of the personal bank, will be equally as transformational to the business bank.”

Macquarie also flagged its ambitions to expand its share of direct mortgage originations, with the bank currently holding just 1 per cent of the non-broker market. Indeed, still 94 per cent of Macquarie’s lending is delivered through mortgage brokers.

“We do see direct as a future growth opportunity [in the non-broker market] as more customers come to see the value of our superior digital offering relative to branch banking and as we continue to build Macquarie’s brand to be as iconic in retail as it is in the corporate space,” Heeley said.

Alongside the loan originations platform is the bank’s Macquarie Business Online platform, which similarly transplants the capabilities of its retail bank into the business banking space.

This includes the launch of a new digitally native Business Savings Account (which Macquarie boasts can be opened online in minutes, offering business clients a “strong interest rate and no fees”).

“We’ve moved all of our clients onto this new [business] platform and almost all of the functions that clients need to perform are now available digitally to them on it,” Heeley said.

“That has resonated really well with our business banking clients”, he said, noting a significant increase in the business bank’s NPS score from +18 to +26.

Over the last 12 months, Macquarie has also recorded an eight per cent growth in new-to-bank business customers.

Today, Macquarie’s new-to-bank onboarding and origination process “takes a few minutes”, and for existing customers, “a couple of seconds”.

Heeley added, however, that “there’s a long way to go here”.

“We’re pleased with our progress, but what’s even more encouraging is the size of the market in front of us. The segments of the markets that we’ve chosen to operate are extraordinarily large and have been growing over a consistent period of time.

“The opportunity here is to benefit from the growth in these markets and given our very small market share, the opportunity to dramatically increase our market share.”

Speaking earlier in the day, Greg Ward, who heads Macquarie’s BFS, said: “Because we are such a small market participant, there is big opportunity to dramatically expand that lending base, without going [up] the risk curve or being the price leader.

“We haven’t had technology to facilitate that level of growth, but that is now coming through.”