Written on the 8 June 2016 by Jenna Rathbone


UBANK'S head of digital Jeremy Hubbard says in this day and age it is no longer the big that eats the small, it is the fast that eats the slow.

With this in mind, the company is working towards disrupting the banking industry, launching the country's first online mortgage in 2011 and acting entirely online and over the phone.

Speaking at the Innovation and Strategy World Forum, Hubbard (pictured) warns 'disrupt, or else'.

"Our world is changing faster than ever before, and just because you are successful it doesn't mean you should stay on course; that you shouldn't change," says Hubbard.

"In fact, successful companies change all the time."

Hubbard says businesses need to be purposefully built for disruption and while technology is often referred to as being disruptive, he says it is actually the business model behind that technology that is disruptive.

In 2016 he says that is one of the most exciting trends the country is seeing, with companies that traditionally operated in one sector or one industry taking that knowledge and translating it to another industry.

"Today being disruptive is mandatory, it is no longer the big that eats the small it is the fast that eats the slow," he says.  "And just because you are the biggest, it doesn't mean you have the advantage."  

UBank is an Australian online bank with no branches and offers fewer costs than traditional banks.

It was launched in October 2008 and is developed and backed by the financial strength and global capabilities of National Australia Bank (ASX:NAB).

UBank aims to simplify banking, currently offering UHomeLoan, high-interest online savings accounts such as USaver and a range of high interest term deposit accounts, which can be used by self-managed super funds.

Hubbard says UBank was born a disruptor and this is backed by the brand launching the industry's first digital mortgage.

"It was a particular feature in question that there was some scepticism around," says Hubbard.

"There was some debate around whether or not this feature would be used. It was a sizeable investment for UBank at the time and we had a choice to make; we could either stay safe like all of the other banks were doing at the time or we could trust our instincts, and build our new feature.

"Fortunately we chose to trust our instincts and, within the first two months of launching our digital mortgage to the market, more than 90 per cent of our customers were uploading their documents online.

"So my advice is to get out of your own way, trust your instincts and don't be bound by the way it has always been done in your organisation or industry."

Earlier this year UBank restructured its business with a rebrand and campaign focused around people thinking about their needs versus their wants.

"We are essentially asking customers to borrow less and live more, to really get in control of their money and think about what makes them happy," says Hubbard.

"Why did we do this?  After talking with our customers it was clear that they wanted simpler, better, smarter banking we heard, and we did.

"We had to work from the inside out changing our culture, changing the way we talk to our customers and changing our process and systems.

"With a vision and mission in place, we went about transforming our business and we did this in three ways changing our model to be nimbler and effective, making space in our company for disruption and creating a highway for change."

Establishing purpose

While it may sound obvious that a business needs a purpose, Hubbard says it is often overlooked in the midst of other priorities.

"We have all been there, with the urgent getting in the way of the important," says Hubbard.

"But it is really important that you and your leadership team keep your business purpose front and centre at all times. And once that has happened, it is about cascading that purpose through the business."

He adds that disruption and innovation requires an agile environment that is open to experimentation.

Companies with really strong governance are unlikely to disrupt, he says, as they are too focused on what return they are going to get.

He adds that many organisations abort the spirit of disruption for fear of their people doing the wrong thing and put in extra controls and governance.

"With this type of slow thinking, I would call it, you are not going to stay in front for very long," says Hubbard.

"What is really required is a higher trust, low processed culture and this is about empowering your people and making the most of their capabilities.

"Having an agile culture makes sure things can happen quickly, changes are made, processes are updated and waste is diminished."

Making room for disruption

Netflix is proving to be the ultimate disruptor, transitioning from a disc rental business to an online streaming business.

Hubbard says it is a great example of what companies need to do in their mission to disrupt.

"It is really about taking a step back and looking at the things that affect your business day-to-day and then reviewing and improving the structure of your business so it is purpose-built for disruption," he says. "(Netflix) realised they needed to do things faster."

In addition, having a strong focus on both hiring and retaining talent needs to be a priority.

An A attracts an A while a B attracts a C, says Hubbard.

"It is absolutely imperative that we hire the right talent and if you don't, the consequences are huge," he says,

"We find that B players tend to hire C players because they don't have the confidence to get people as good or better than them, whereas the A players have that confidence to hire people and look for talent that is as good as they are or better than they are."

UBank uses a three-step process when hiring staff.  The company kicks off with a standard technical interview where the candidate is assessed on their skills, knowledge and experience.

That is followed up by spending another hour or two with the candidate in a more casual setting whether that is at a coffee shop or over a glass of wine.  This is to get to know the individuals on a more personal level and gauge how they would interact and bond with the team.

And finally it is finished off with a cultural interview where two members of the UBank leadership team that weren't involved in the hiring process conduct a final interview.

Creating a highway for change

While UBank says it still operates much like a startup, its systems and procedures have grown and become more complex over the years.

Like Spotify, UBank uses the same delivery model: think it, do it, ship it and tweak it.

"The real trick in this model is how to shorten that cycle time," says Hubbard.

Many businesses can spend three months on a business case, three months in the requirement space, another couple of months or more on the build, and eventually ship the product.

"By the time you have shipped that product, it is not what the customers want or not what the business wanted," says Hubbard.

"This process is about not perfecting the product before you ship it and it is the act of actually trying to get it perfect that extends the whole cycle time.

"Get it good enough, get it out there and tweak it.  Have confidence in that cycle being shorter.  You need to have your systems designed for agility."

Author: Jenna Rathbone
About: Jenna Rathbone is a Queensland-based journalist who writes on a range of issues including business and property affairs and social issues.
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