Westpac is joining the 10-minute approval trend to compete with neobanks, launching its own version of a digital mortgage.

The new digital mortgage will provide a simpler process for refinancers, allowing them to achieve unconditional approval in as little as 10 minutes.

Westpac intends to make this new loan available in the final quarter of the year initially for new and existing owner-occupier sole applicants refinancing to Westpac’s Flexi First variable home loan.

The offer will be available through Westpac’s website or banking app.

Applicants for the digital mortgage are required to have a 20% equity in their property and be on a PAYG income.

Plans are already in place to expand this new feature to a range of other mortgage products next year.

Westpac chief executive for consumer and business banking Chris de Bruin said this new service makes refinancing simpler, improving from the previous process which usually takes weeks to approve and involves several manual steps.

“While we are speeding up the home loan process, we are still performing the right checks and balances to ensure we are lending responsibly,” he said.

“Customers who do not meet the criteria for a digital loan or have more complex needs will have their applications assessed by a lender.”

Mr de Bruin said digitising the mortgage process will benefit the whole lending service of the bank and accelerate approval times for wider home loan applications including from customers who are transacting through bank branches and brokers.

Digital-first bank, interconnected branches

Westpac Group CEO Peter King said launching a digital mortgage is a step towards the bank’s future network and service model, which already caters five million digitally active customers.

"This innovation is about digitising our end-to-end mortgage processing to make the time from application to unconditional approval easier and faster, with no paperwork,” he said.

“We are investing to create a digital first bank, where customers can choose to interact with us through online channels from start to finish and we'll also continue to support customers seeking face-to-face service through our bankers and broker network.”

Mr King said digital technology will be integrated throughout Westpac’s branches, creating an ecosystem that would allow customers from Westpac subsidiaries — St.George, Bank of Melbourne and BankSA — to do their cash transactions at a Westpac branch.

This is part of Westpac’s co-location program where select branches are combined, bringing two Westpac Group brands together under one roof.

The bank has already co-located 21 branches in key locations, including Bega and Dubbo in New South Wales, Alice Springs and Darwin in the Northern Territory, and Port Pirie in South Australia.

Over 100 branches are currently being reviewed for a possible co-location in the next 18 months.

“The co-location approach enables us to move two branches into one single location in cases where the two buildings are located very close together,” Mr King said.

“This maintains a physical presence for customers and signals a long-term investment in these communities, while reducing footprint duplication in the same location.”

Revamped Westpac mobile app

In line with its ongoing investment in digital technology, major upgrades in Westpac’s mobile banking app are expected to come over the coming months.

The changes include launching a spend tracker feature, which will allows customers to categorise expenses and help manage the cost of living.

The new feature will include tools that will provide a way for customers to view accounts from multiple financial institutions in the Westpac app and give customers a better overview of their finances.

Customers will also be able to tag tax-deductible expenses throughout the year to help them prepare their tax returns.