AAP

National Australia Bank is shrinking its branches and increasing self service as it aims to save about $800 million a year and win customers from its rivals.

Australia's leading business lender will also upgrade its technology and centralise most of its operations under a five-year plan.

"The aspiration is to have as many of our products and services available to be done on a do-it-yourself basis or on a no-touch basis as possible," chief executive Cameron Clyne said on Wednesday.

"We need to have a new strategy going forward which reflects the times."

NAB aims to reduce the overall size of its near-800 branches by 25 per cent, without closing any stores.

"They will change in their size and the services they are offering to be complimentary to our digital channel," Mr Clyne said.

But the amount of time NAB personal and business banking staff spend in front of customers will be increased.

The changes are being made in response to evolving customer needs, an ageing population and the lower demand for loans from consumers and businesses.

No major staff layoffs are expected as part of the plans.

Mr Clyne admitted the strategy is no different to those outlined by its rivals, but said the difference would be in which bank best carries out its plan.

"It will come down to execution," he said.

"I'm not worried about where growth is going to come from - 85 per cent of Australians don't bank with our personal bank and 75 per cent of businesses don't bank with our business bank - there's plenty of opportunity in Australia."

NAB expects the changes to deliver annual cost savings of about $800 million from 2018, and the costs of changes to be less than the savings target.

Morningstar analyst David Ellis said $800 million in savings represents about eight per cent of what he expects the bank's expenses will be in 2017.

"(That is) a significant saving, and positive for sustainable profit and dividend growth," he said.

But NAB shares fell on Wednesday, along with other bank shares which have all posted strong gains recently.

NAB was down 67 cents, or 2.1 per cent, at $30.87 at 1414 AEDT.

The bank will also overhaul its senior management structure when the changes begin to be implemented in April.

Executive director of finance, Mark Joiner, is to retire by the end of 2013, and NAB Wealth group executive Steve Tucker will be replaced.

Other positions have been shuffled.