BOQ Group to roll out digital mortgages in 2024/25

BOQ Group — which includes retail banking brands BOQ, Virgin Money Australia (VMA), and ME Bank (which it acquired last year) — has revealed that it will have a digital mortgage for all brands in 2024/25.

The move continues on from its digital transformation process, which has been recently focused on migrating ME Bank customers onto the new core platform (Temenos v.18) for the digital bank and delivering digital transactions deposits to BOQ and VMA customers.

There are now reportedly $1.5 billion in deposits on the group’s new digital platform, with digital deposits launching for all new customers by 2023.

This was prioritised given its benefits to the majority of customers (deposit holders) and improves the group’s funding.

Next year, the group intends to build and test its home loan core and origination before launching “simple” digital mortgages for new customers in 2024.

This will be followed by digital personal loans for all brands on the new digital bank, which BOQ Group has flagged would be “a real revenue opportunity for BOQ”.

The business banking brands are also expected to benefit from the transformation, first from digital leasing and deposits/payments, before complex home loans and business lending come online after 2025.

The banking group flagged that the “cloud based, end-to-end digital bank”, would lead to “to improvement in productivity, customer experience, innovation and embedded compliance leading to improved risk controls”.

Releasing the banking group’s financial results, managing director and CEO George Frazis elaborated: “We have advanced our strategy and have a clear pathway to 2025 which builds on the success of our execution to date on the digital transformation and the ME integration.

“We are a step closer to building a truly multi-brand, cloud-based, digital retail bank with the launch of myBOQ joining VMA on the new common core digital banking platform to enhance our customer experience…

“The integration of ME is well progressed and we continue to execute against our strategic transformation roadmap. 

“We have a clear pathway to the inclusion of ME on the digital bank platform and a plan to launch the new ME digital transaction and savings product and migrate existing ME deposit customers by the end of calendar 2023.”

Mr Frazis said that by moving the bank into the cloud in a staged approach would help reduce risk.

“The transformation is digitally end to end and will span the full range of products and processes across the retail bank, business bank and support infrastructure,” he told shareholders.

“All customers will be migrated onto the new digital bank, which will allow for complete decommissioning and simplification of our future state.”

As well as confirming its phased approach to becoming a fully digital bank, the CEO also confirmed the financial results for the financial year 2022.

Over the year, the group saw its mortgage book increase by $4.4 billion to just over $63.4 billion — with ME Bank particularly seeing strong growth following its acquisition.

Broker flow for FY22 was up to 55 per cent — with the third-party channel responsible for 45 per cent of the portfolio.

Statutory net profit after tax increased 15 per cent to $426 million over FY22, with cash earnings after tax down 5 per cent on FY21 to $508 million.

[Related: BOQ Group reports $2.6bn mortgage rise in 1H22]