NAB retains 85% fixed-rate clients amid cliff

Ms Triandos said the bank had retained approximately 85 per cent of customers whose fixed-rate loans matured this year, largely due to the robust performance of the broker channel.

The bank’s strategy of focusing on customer retention rather than the previously offered $2,000 refinance cashback incentive had also contributed to high retention rates.

“Brokers are an important part of that conversation,” Ms Triandos said.

“We’re doing everything we can to help brokers on the ground”, noting that around 62 per cent of new flows come from the broker channel.

“The biggest opportunity for brokers in this market really is to make sure they’re having conversations with customers.”

Indeed, a pivotal emphasis for the banking sector in 2023 revolves around technological advancement, digital innovation, and cyber security.

As such, she conveyed to brokers that these aspects remain “at the forefront” of NAB’s operations “each and every day.”

“We’ve done a lot in the technology space. We’ve enhanced our instant pricing tool which enables a broker from a customer with digitised accreditation training through our suppliers,” Ms Triandos said.

Recognising the ongoing threat of cyber attacks to both customers and businesses, NAB is currently engaged in 64 projects aimed at countering scammers and bolstering security measures.

Furthermore, as the banking sector has been at the forefront of harnessing open banking capabilities to share data and facilitate mortgage services within a more secure and efficient framework, NAB reported it had received around 21,000 customers who have already requested to share data between a period of July 2020 to March 2023 after adopting CDR.

Inflation to spark further interest rate hikes

Chief economist at NAB, Alan Oster, weighed in on the broker briefing, warning a forthcoming spike in the third-quarter Consumer Price Index (CPI) will likely lead to additional interest rate hikes in the near future.

The Australian Bureau of Statistics (ABS) reported a 6 percent inflation rate for the June quarter, indicating a 0.8 percent rise from the previous quarter’s decline, which fell below market expectations.

Mr Oster said inflation is currently “too high” and anticipates additional pressures to emerge in the September quarter.

In particular, Mr Oster expressed concerns about a noticeable economic slowdown, reduced business lending, and persistent inflationary pressures expected throughout the third quarter of 2023.

Consequently, he warned that the third quarter Consumer Price Index (CPI) is likely to be around 1 percent or higher for the quarter.

As such, although the Reserve Bank of Australia (RBA) has maintained the cash rate at 4.1 per cent for the past two months, Mr Oster remains doubtful that inflationary pressures will remain subdued, confirming his expectation of another interest rate hike by November taking the cash rate to 4.35 per cent.

“More importantly, we see the RBA cutting rates around August–September next year, and we think they’ll go back to something around 3 per cent,” Mr Oster said.

Meanwhile, three of the other major bank's economists are forecasting the cash rate to hold steady at 4.1 per cent.

[Related:Fixed rate commitments jumped 70% in June]