Nationwide Building Society has announced it will increase tech spending by an additional £1.3 billion as the firm continues its emerging technology drive.
The building society said the investment will enable it to improve online services, capitalise on emerging technology trends – such as artificial intelligence (AI) – and launch a new technology hub with the potential to create more than 1,000 jobs.
Increased investment will also help the mutual to keep pace with an ever-changing financial services sector and compete with fintech startups.
This investment will amount to £4.1 billion over the next five years, and comes during a period of disruption in the banking sector in which traditional lenders and industry incumbents are facing increased competition from online-based banks and financial apps.
To keep pace, Nationwide said its innovation agenda includes the creation of a £50 million fintech venture fund and the launch of Open Banking aggregation services.
In 2008, Nationwide signalled its intention to invest in emerging technology when the company embarked on a £1 billion project to transform digital services. This initial project entailed upgrades to its data centre and the decision to outsource IT services for the first time.
A landmark agreement with Tata Consultancy Services in September 2017 saw the introduction of AI in an attempt to reduce back-end systems issues and fuel the rollout of more digital products.
Increased investment in AI and machine learning will enable the society to drive a “step change” in analytics and insight capabilities. While AI is a key focus, so too is the company’s data management, with the mutual announcing a reduction in its current data stores from 20 to two.
Mobile services form a significant part of this latest investment programme and the building society said it will focus heavily on increasing services through this medium. The number of mobile banking members has grown by more than 40%.
Building on Success
Tony Prestedge, Nationwide’s deputy chief executive, said that the mutual intends to strike while the iron is hot and build on recent successes.
“Nationwide is in an incredibly strong position, something we’ve achieved through understanding consumer needs and serving members on their terms,” he said. “Testament to this is that we have, over recent years, realised record membership, customer services and financial strength and security.”
Prestedge added: “As a mutual, we can afford to take a longer-term view rather than focus on short-term gains. The pace of technological change means that we need to reassess continually how we serve our members in order to remain relevant, valued and competitive.
“We are therefore seizing this moment with confidence as we set ourselves up to succeed long into the future.”