BoQ set to roll out digital mortgage platform

Bank of Queensland is to begin offering digital mortgages within the next four months as part of a "cost saving" transformation program. 

The bank is in the final testing phase of its digital mortgage platform and aims to launch it by the end of the financial year ended August 31 2024.

Following an initial launch with Virgin Money, BoQ intends to roll out the platform to its subsidiary ME Bank and to its broker channel.

“The delivery of digital mortgages will enable BoQ to compete at a lower cost, a faster time and with a materially improved customer experience,” BoQ managing director and CEO Patrick Allaway said during the ASX-listed bank's half-year investor presentation.

BoQ's ongoing multi-year transformation now sees 23 percent of retail customers using its digital offerings.

The company has also moved its entire workforce onto Microsoft 365. 

The bank is migrating customers from ME Bank’s legacy platforms onto its new cloud-based banking platform over the next 12-to-18 months.

BoQ acquired ME Bank customers in 2021 and unveiled its new cloud-based ME Go app last year.

The migration, Allaway said, will “be the most challenging and beneficial period of [the] transformation” and will end with the decommissioning of ME’s legacy platform.

“We are at an exciting juncture of our digital journey,” Allaway said. “However, we recognise that migrations are not without risks and disruption for our customers. We have a well-planned and sequenced process.

“Migration off the ME legacy systems will reduce legacy and risk from the end-of-life systems," he added.

For the first half of the financial year ended February 29 2024, BoQ accrued $524 million in cash operating expenses, part of which stemmed from its investment in risk, compliance and technology.

By the end of the financial year, the bank is expected to recognise "technology costs" of around $14 million in relation to its "group-wide operating model review", and a $27 million write-down in the value of ME Bank's core banking system.

Allaway said the launch of its digital mortgage platform and the ME migration will “provide significant cost savings for the organisation”.

“They are key programs in lowering our cost to serve in a highly commoditised market,” he added.

Allaway also claimed the bank is looking at “improved ways” of using artificial intelligence, citing its deployment of Microsoft Azure as helping “accelerate [its] transformation in cloud, customer experience and AI”.

“We’re looking at improving and automating our processes, so there are multiple streams of work,” Allaway said. “We have no identified further pathways, but we are very focused on identifying our cost of serve as major uplift to our balance sheet.”