NatWest is saving on costs and improving the customer journey through technology. 

“Since 2021, we have delivered run rate savings of around 250 million pounds ($315 million) a year through digitizing customer journeys,” newly appointed Chief Executive Paul Thwaite said during the bank’s fourth-quarter earnings call today. “We continue to simplify journeys across the bank in order to improve customer experience and deliver further savings while streamlining systems and processes.”

As London-based NatWest invests in digitalization, demand for digital banking has grown; nearly 94% of its retail customer needs were met digitally in 2023, compared with 53% in 2019, according to the report. 

The $847 billion bank reported it spent $1.6 billion on technology and cybersecurity in 2023. 

As part of its technology spend, the NatWest is investing in AI and data for internal purposes to improve productivity and allow employees to focus on building deeper relationships with customers, Thwaite said. 

THE BIG PICTURE: NatWest partnered with AI technology providers last year to enhance customer experience and increase efficiency.  

For example, NatWest teamed up with Amazon Web Services in September to use the cloud provider’s gen AI tool, SageMaker, to provide its customers personalized services like setting up financial goals to buy a house and saving money for a business venture. 

NatWest has also embedded IBM‘s watsonx into its chatbot experiences, IBM Chief Executive Arvind Krishna said during the tech giant’s Q2 earnings call in July.

The bank reported that it aims to use data and technology to predict consumer needs along with reducing costs of operations.  

BY THE NUMBERS: In Q4, NatWest reported; 

• Net interest income of $3.4 billion, down 8.2% YoY; 
• Total income of $4.4 billion, down 4.6% YoY; and 
• Operating expense of $2.7 billion, up 0.7% YoY. 

WHAT THEY ARE SAYING: NatWest and Lloyds Bank will experience a fall in noninterest income in 2024 as the economy cools down due to high rates set by the Bank of England, according to a Bank of America Securities report published Jan. 30. 

“At NatWest, 70% of noninterest income is from commercial and institutional banking, and a recovery in trading performance supported strong growth in 2022,” the report stated. “We factor in low single-digit noninterest income growth for both companies in 2024.” 

NatWest reported a noninterest income for 2023 at $4.1 billion, up 2.1% YoY, according to the bank’s earnings report. 

NOTEWORTHY: Thwaite, who was named interim CEO in July 2023, aims to use technology to build a more resilient bank for changing customer needs, he said in the release. 

“We look forward to working with a new CEO who has proven skills to support the group’s continued progress and who I know cares deeply about this business and its customers,” NatWest Group Chairman Howard Davies said during the earnings call. 

In 2024, the bank aims to keep its expenses in line with 2023 numbers by using technology, Thwaite said. 

Editors Note: All figures converted to USD.

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