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Nationwide increases cost savings target as digital spending jumps

Nationwide wants 60% of active current account members using mobile banking
The mutual remains committed to its branches

Nationwide Building Society has increased the scale of its cost-cutting programme by £200mln as it accelerates its move towards digital banking.

By 2023, the building society wants to make ‘sustainable saves’ of £500mln, compared to a previous target of £300mln.

READ: Nationwide expects fierce rivalry in mortgages to persist as it posts lower quarterly profits

Nationwide also wants 60% of active current account members using mobile banking and will build a new technology hub employing 750-1,000 people to support the digital drive.

An additional £1.3bn has been earmarked to cover the cost, which takes the projected spend on IT over the next five years to £4.1bn.

Nationwide at present has 650 branches and said it remains committed to this network even with the additional focus on digital.

Mobile banking is becoming increasingly important as start-up challenger banks without branches eat into the traditional mortgage lending and savings business.

That has seen fewer people in using branches and a growth in online baking.

Joe Garner, chief executive, said: "Nationwide is in a position of financial strength with capital levels at an all-time high.

“At a time when customer expectations of service are rapidly changing in a digital world, we are investing to ensure that we continue to provide leading service.”

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