Former Equifax chief executive Nerida Caesar, who today joins Westpac as a director, says there is “no better time” to sit on a bank's board.
Despite her appointment this month coming amid heightened industry-wide scrutiny and attention on boards' duties, Ms Caesar said joining Westpac as a director was a “challenging opportunity” she was excited about.
“There's absolutely a job to be done by financial services to tighten up processes, systems and compliance, but at the same time there's a great opportunity for a bank like Westpac to continue to lead in the industry, to keep building on its great brand," she said.
Ms Caesar’s decision to take on the directorship follows more than 30-years in management positions, most recently as CEO of stockmarket-listed credit agency Veda, which was bought by Equifax last year. She remains on the Equifax board.
She was previously in group managing director roles at Telstra following more than 20 years with IBM in senior roles across the Asia Pacific region.
She said that while technology and data-driven customer innovation was a top priority in financial services, banks needed to choose between being "caught by their legacy” or “innovating” around it.
“Companies are creating like never before – there are a lot of ‘firsts’ happening – bringing life to new ways of working that consumers hadn’t even imagined,” she said.
“A decade ago, when smart phones became more prevalent, power moved into the hands of the consumer and new business models emerged. Before, we were having a data centre discussion; now it’s about front of house, how to build for consumers who have smart phones in their hands, with the capability of application programming interfaces (APIs) to open up data and make it accessible.
“Changing out back-end (banking) systems is like doing heart and lung surgery – it’s massive. But there's no reason why a mature company can't innovate around it.”
Banks' technology strategies have differed in recent years based on their legacy systems, as some overhauled core banking platforms while others, such as Westpac, prioritised their investment on other projects and innovation.
Westpac chairman Lindsay Maxsted said the board would be strengthened by Ms Caesar’s “deep business experience, particularly in technology and innovation”.
Ms Caesar warned that companies’ fears of data security breaches were well founded and that new data breach reporting laws due to come into force next year would be a “good thing for consumers” as companies become more diligent.
She’s also still a strong believer in Comprehensive Credit Reporting which allows companies to access more data, specifically consumers' "positive" credit history rather than just their negative past.
“It's really important to move in that direction. Australia is one of the last two OECD nations in the world to not have [positive credit] reporting," Ms Caesar said.
With CCR taking time to gain traction in the past three years, the government recently flagged it will make company participation mandatory if needed.
Ms Caesar said companies shouldn’t think about CCR as giving their data away, but about using it in a way that benefits the economy by opening up new opportunities. She said Equifax “proved out” the uplift it could bring to large lenders, not just small lenders and fintech start-ups, as has been predicted by many commentators.
“It's going to be quite a change, and you could argue both sides of whether it should be mandatory. But you need a critical mass of data of around 40 per cent of all lending relationships for the data to be predictable," she said. "We're at about 29 per cent data load today, and by Christmas we'll be at about 35. New Zealand is well over 50 now – they are just getting on with it.”
Ms Caesar is also a director of Sydney-based fintech hub, Stone & Chalk. This has firmed up her belief that large companies open to bringing small players into the fold as partners to take a product idea from inception to mass scale, will differentiate themselves from those which choose to restrict data and build products in-house.
She also sits on the University of Technology Sydney’s vice chancellor’s industry advisory board and the federal government’s fintech advisory group, and she’s a non-executive director of Garvan Institute of Medical Research subsidiary, Genome.One.
Ms Caesar said the key factor that drove her towards Westpac was the place it plays in supporting the economy, and the opportunities ahead with open bank data, API strategy and the “power of the consumer”.
“Australia is at the bottom of the curve on productivity as an economy. The banks play a major role in lifting that.”