Suncorp unveils transformation-ready operating model, appoints new banking chief

Pressure from Covid and a devastating bushfire season has driven Suncorp to consolidate and streamline several core functions as well as make substantive personnel changes across its business, the Queensland financial services giant revealed in a recent update.
In an effort to “fast-track digital and automation capabilities and opportunities” across the group, Suncorp said it has moved to better align its strategy and technology functions, leveraging the Covid crisis “as an opportunity to speed up the pace of transformation”.

“Covid-19 has resulted in changes such as the faster adoption of digital channels by customers and new, more innovative and agile internal ways of working,” Suncorp group chief executive Steve Johnston said.

“It has changed our perspective on what is possible.

“We now need to seize this opportunity to speed up the execution of our priorities so we can continue to deliver for our people and customers, while growing returns and creating better outcomes for our shareholders.”

Though the company did not address its technology and transformation agenda in detail, Johnston stressed that it will be “customer-led, but… technology-enabled”.

“In addition to maintaining the availability and security of our multiple core systems, Suncorp’s CIO – as leader of the technology and transformation function – will drive a digital-first program of work across all businesses.

“This function will leverage our new ways of working and guide our digital and automation programs, working alongside our product and distribution teams in insurance, banking, and New Zealand.”

In a newly expanded role, Clive van Horen, previously a customer solutions chief at CBA, has been appointed to the recently vacated position of Suncorp’s chief executive, banking and wealth. The position was previously held by Lee Hatton, who left the business in May for BNPL outfit Afterpay after just three months in the role.

Under Suncorp’s operating model revisions, van Horen’s banking and wealth function will expand its remit considerably, assuming control over all banking and wealth operations, including customer strategy, finance, marketing and digital distribution, with several functions being pulled back from centralised teams.

Suncorp said the move would deliver “greater end-to-end operational accountability… [and] drive improved performance”.

“The changes are aimed at improving the competitiveness of the bank through faster decision making, greater digital capability and the ability to address the direct expense base. Where it makes sense, functions (such as IT infrastructure) will remain at Group level.”

With the banking and wealth division’s expanded task sheet, Suncorp has also seen to disbanding its short-lived ‘customer and digital’ function, with the recently appointed chief information officer, Adam Bennett, now assuming responsibility for group technology infrastructure, data governance and strategy, security, group strategy and transformation.

Bennett joins the business from today.

Lasting less than a year, the customer and digital function was hastily formed mid-last year following the sudden departure of Pip Marlow, who spearheaded the now indefinitely stalled customer marketplace initiative.

The API-led marketplace strategy was a grand, customer-level, consolidation play by Suncorp, pitched as a type of all-in-one ‘app store of services’ across its myriad banking and insurance product offerings. On Marlow’s departure last year, Johnston deemed the marketplace initiative “too ambitious” for its existing resources.

Lisa Harrison, who took charge of the customer and digital function last year, will move to a new role as ‘product and portfolio’ chief within Suncorp’s insurance business.

Following the sale of Suncorp’s Life Insurance business, the business saw fit to shake-up its wider insurance business and, it said, fundamentally “consolidate” the insurance division’s head offices.

“This essentially combines a layer of the organisation which will improve decision-making, reduce duplication, and establish greater efficiency,” Johnston said.

“This”, he continued, “will accelerate our efforts to driving sustainable change across all aspects of the organisation from customer experience through to distribution and operations.”

Harrison’s product and portfolio role will lead the division’s distribution channels, handling contact centres, digital channels and intermediated partnerships as well as customer strategy, brand and marketing, product and pricing, and innovation.

“Insurance represents an even larger proportion of the Group’s profit and therefore requires greater focus on transforming revenues and costs,” Suncorp said.

As a result of the changes, incumbent chief executive of insurance (Australia), Gary Dransfield, will depart the business.

In announcing the sweeping personnel and business model changes, Johnston notably flagged Suncorp’s shift away from the big, grand programs of work that have characterised the business over the last decade – a particularly significant move in the wake of several stalled business-wide transformation initiatives, including most notably both ‘marketplace’ and Oracle core banking replacement programs.

“Through simplification, optimisation, differentiation, we’ve been through all of these big programs alongside BIP, one of the benefits we’ve had of doing that over the last decade is that we have all the tools within the organisation to deliver these benefits,” Johnston said during an analyst call covering the business update.

“We’ve got good digital capability, good automation capability, good process improvement capability, and we’ve got established offshore partners sitting with us.

“What we need to do now is apply all the skills… and assets we have in the organisation to a program of work to automate manual processes, to digitise our sales and service capability on distribution and claims lodgement, and to drive material changes to the profile of our organisation over the next two to three years.”

Johnston said he was keen to avoid big launches and distractions of “massive programs of work”.

“I want to embed this all in the organisation, and I want that to be reflected in improved expense ratios, and improved loss ratios as we move forward with better pricing and better analytics, better cost of income ratios, so that you can see absolutely how we’re delivering to the bottom line.”