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Banking Banking

course, can pick up some of that business in PNG and Fiji now, introduction of mobile wallets means that mobile network
and PNG will be the biggest market for that infrastructure operators are reaching more remote areas than banks ever
program. will.
“But it's not just the Australian infrastructure financing “The branch as it is today will not be the same in five, ten
facility. All of the multilateral development banks have years. And the reason for that is digital, technology take-up in
significant programs in and across the region. A lot of those Fiji is really, really strong. Mobile penetration is 80, 85%, its
programs will be delivered by Australian business too and if phenomenal.”
they have the choice of working with Australian banks, that Smith says 60-70% of activity in branches currently relates
will generally be their preference.” to cash and cheque handling, and once that disappears,
Yourn says the onus is now on Westpac to fully engage in its branches will look very different.
two Pacific markets. “Knowing that will happen, we are really conscious
“I think that means probably investing some money,” he around not overcapitalising in bricks and mortar, and all
notes, adding that for “seven or eight years really, they've our investment will go down then digital route, mainly to
been in this sort of in-between land. I think they probably improve the customer experience, grow the business, and also
haven't invested in systems and stuff like that in their significantly mitigate risk.”
businesses in the Pacific and some of those systems are a In Australia, Westpac has acquired a money management
bit clunky these days. Westpac has made a decision, which app, and Smith says they are exploring how it might be rolled
has been publicly announced about investing more in their out in Fiji.
systems and it in Australia, and hopefully some of that will “What’s interesting for me personally in the last few years,
flow through to the Pacific operation as well.” is that even though investment in the business was limited,
The Australian Financial Review has reported Westpac what’s important was that our returns have been at record
sources as saying Chief Executive Peter King had “received levels and it really teaches you a lesson that sometimes
messages from Canberra that it would be desirable to you don’t need all the sort of technology widgets. We’re in
maintain its operations in the Pacific, as China’s interests and the service business and we’re in the people business for
influence in the region expands.” customers…That to me was the big takeaway for the last two
Following October’s announcement, Australia’s Pacific to three years, how important the customer is.”
Minister Pat Conroy said: “The Australian government is really Meanwhile, back in Papua New Guinea, Papua New Guinean
happy about the decision and it demonstrates the Australian economist and FDC Pacific Fellow at the Lowy Institute,
corporate sector’s commitment to the Pacific.” Maholopa Laveil also welcomes Westpac’s decision to stay,
Fiji’s Deputy Prime Minister and Minister for Finance, saying if it had left PNG, it would have concentrated power in
Professor Biman Prasad said the decision to maintain an even smaller number of banks.
its presence in Fiji reaffirms the bank’s confidence and “Domestically I think it’s very good for PNG. It provides a
commitment to economic development and financial stability competitor to retail and corporate clients to BSP and Kina,
in Fiji. which are the largest banks. And there are two smaller banks
“Government looks forward to enhancing its partnership that have been awarded provisional banking licenses for a
with Westpac Fiji to further support financial intermediation, year.”
banking sector development, financial inclusion, and overall He also welcomes Westpac’s undertaking to expand its
economic progress,” Prasad said. operations but asks how it will react to the new taxes on
banks imposed by the PNG government and how will it
Local CEO, Local priorities navigate what he describes as an “ah hoc fiscal regime”.
Shane Smith has been Westpac’s Chief Executive in Fiji Laveil also questions how Westpac (and other banks) will
since February 2022. He was the first local appointed to the in reach PNG’s large unbanked population who are operating in
120 years. the informal economy.
Smith says to his team’s credit, they continued to focus on “They have to tailor the services to both the needs and the
the customers through this period of uncertainly. context. They’ve served in PNG for the last 100 years. And
“My gut feeling is I think we were distracted earlier on. so this is not new to them. They've got a historical footprint,
The moment we went ‘you know what, we have customers to they've stayed in there, they’ve seen the problems, they've
look after, we’ve got a business to run, a great franchise, let’s navigated different governments, they've navigated different
just focus on that’, that really helped. So when the decision changes in legislation. And so it's just increasing it with a
was made that we're going to stay, we were already on our social consideration. And I think DFAT’s explicit support for
journey…and I would say the same for Papua New Guinea as Westpac is encouraging. And it may be geopolitical nature.
well. Really, either way, it helps Westpac’s footprint in the
“Thankfully we didn't drop tools and stand still. Now we region, and really it helps with the domestic conditions of
are here to stay, how do we make this work in a strategic an uncompetitive market, and then addressing an unbanked
fashion?” population.”
Smith told Islands Business that digital services will be a
big part of Westpac’s future in the Pacific and noted that the editor@islandsbusiness.com

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