Lisa Gray has the tough task of finding $800 million in annual cost savings, writes Clancy Yeates.
At the height of the global financial crisis, National Australia Bank executive Lisa Gray had what she calls "one of those blinding flashes of the obvious".
With credit card revenue falling at the personal banking division she ran at the time, Gray asked a colleague what was going on.
"This person turned around and they rolled their eyes and said: 'That's because more people are paying off their credit card every month,"' Gray recalls.
"I said, 'So people are managing their money better?', and he said: 'Yes'."
"I said, 'That's a bad thing, why?' and he said, 'Because we don't make as much money'."
It's a conflict that often lies at the heart of the business-customer relationship. What's in the interests of the business is not always in the interests of the client. But Gray says the exchange was a light-bulb moment.
"I had one of those blinding flashes of the obvious at that point ... which is to say there's something wrong if we bemoan people managing their money prudently because we're making less money."
With chief executive Cameron Clyne also looking to improve the battered public image of banks, Gray went on to play an important role in NAB's attempt to position itself as the consumer's friend.
Various fees were scrapped, its standard variable mortgage rates became the lowest of the big four, and it even claimed to have "broken up" with its big rivals in 2011.
The break-up claim was met with scepticism among some critics, who said it was all a marketing ploy. Some analysts were also unconvinced of the business sense in trying to become the "people's bank".
Nevertheless, Gray now says she aims to bring the same "customer-centric" approach to her new job in charge of enterprise services and transformation, to which she was appointed in April.
But instead of doing things that will obviously be popular with the public, such as cutting fees, Gray's new brief is far more dry: enhancing productivity and streamlining the bank's internal and IT processes.
Not only is productivity distinctly unsexy, it can also be a code for "job cutting" in an environment where banks are dealing with customers who are much more debt-shy.
And while executives often like to talk about what's in the best interest of customers, the market's focus is squarely on the bottom line, and whether NAB can shed its reputation as a long-term underperformer.
Gray, who has previously worked across retail banking and in various wealth management roles, was given the task by Clyne of cutting duplication and overhauling the bank's internal and IT systems as part of a management shake-up in April.
The new role, which analysts said could help position her as a potential internal successor to Clyne, alongside personal banking boss Gavin Slater, makes her responsible for delivering the vast majority of targeted annual savings of $800 million a year by 2018. Two months into the job, and Gray says the processing of mortgages has emerged as an early priority.
Today a typical mortgage application can be handed from a banker in the branch to a customer services division and a couple of teams responsible for credit quality before final paperwork is prepared. Gray reckons NAB can save time and money, and cut error rates, by simplifying things.
"We'll be able to take days out of that process, sometimes weeks depending on the complexity, and it will require one or two less people in our office to be looking at it," she says.
"If you look at the last few years, we've spent a lot of time talking about how do you make the what of banking fairer, be it abolishing some of the most complained about fees, or having the lowest standard variable rate. To me the next phase is making the how of banking fairer, and putting that much more into the hands of the customers."
The bank is trialling processes to cut the administrative work at branches, so staff can spend more time on activities such as providing financial advice, which are also more lucrative.
However, NAB's push to lift productivity may well involve more significant changes for staff.
The big four banks cut more than 4600 jobs in the past 18 months, the Finance Sector Union says, and NAB's staff numbers were down 731 year-on-year in the latest half.
Gray is not expecting heavy job shedding, with the bank more likely to move staff into areas where they are most needed.
"I'm not expecting to see net growth in employee numbers. You may see a reduction but that will be a combination of productivity improvements and attrition."
On the controversial issue of "offshoring" to lower-wage countries, Gray says the bank may consider it as one option but "sacred" functions such as talking with customers would not be sent overseas.
The market is broadly supportive of NAB's efficiency push at a time when banks are being forced to compete more fiercely for customers.
Bell Potter analyst T.S. Lim says small- and medium-business banking, where NAB has the biggest market share, is a growing priority for rivals and NAB cannot afford to rest on its laurels. "It's got 25 per cent of the SME market," Lim says. "I think the margins are still pretty good but basically there's a lot of competition. There's only so much you can do with margin, so it has to be productivity."
Ultimately, what will probably matter most to the market is whether Gray can deliver on the promised cost-savings and improvements to efficiency.
If things go well, Gray will be viewed as a potential internal successor to Clyne, in an industry where Westpac's Gail Kelly remains the only female chief executive.
Given this male dominance, Gray says there is more work to be done in lifting the proportion of women in senior management positions.
She nominates stronger links between gender targets and senior management bonuses as one area to look at, citing a recent report that showed there had been little change to the very low proportion of women in senior management positions.
"I think one of the critical questions is, are targets enough? Targets can work if there's consequence for not delivering on those targets," she says.
Among the male-dominated management ranks of the country's biggest banks, the idea that bonuses would be at greater risk if they don't meet gender targets may still take some getting used to.
But then again, so may the idea that banks should not complain when people are paying down their credit cards more quickly.