Australian mutual banks may offset costs through process automation

It could help banks sustain their historical loan growth of about 6%.

Australian mutual banks could improve efficiency and protect profitability by increasing investments in automation and digitalisation, according to a report released today by S&P Global Ratings.

The report, Digitalisation May Pay Off For Australian Mutual Banks, noted that automation would likely help the 18 rated mutual banks sustain their historical loan growth of about 6%, which has consistently outpaced the sector average.

S&P Global Ratings analyst Lisa Barrett said savings from process automation could offset initial spending, whilst greater investment may help prevent market share losses to larger banks. 

She added that faster loan processing and digital onboarding of members would support growth, whereas failing to modernise could erode competitiveness and weaken business profiles.