The chief executives of Westpac Retail and Business Banking, St George and BT Financial Group (Jason Yetton, George Franzis and Brad Cooper, respectively) will now report directly to Mr Hartzer.
A statement to the ASX said the new model would maintain the bank's "one team approach that has been a feature of Westpac's success".
In addition, Westpac's technology function will now report directly to Mr Hartzer rather than chief operating officer John Arthur.
Mr Arthur will now have responsibility for the retail product development, marketing and analytics functions previously within AFS.
Mr Hartzer said the changes would build on the "strong performance and collaboration" across the executive team.
“The close coordination of our Australian businesses has served us well. To maintain this momentum and ensure I personally stay close to customers, the chief executives of each customer-facing business will report directly to me," Mr Hartzer said.
"I am proud of what AFS has achieved over the past three years and I am confident that the refreshed structure will continue to build on our successful portfolio of brands.
“However, to ensure we maintain momentum and coordination across our brands, we will keep together the retail product, marketing and analytics functions. I have asked John Arthur to oversee these critical areas.
"Combining these elements with our existing operations functions will simplify our structure and create productivity benefits.
“Further, given the changing ways customers are choosing to manage their finances, particularly through online, digital and mobile solutions, the technology function will be critical to us achieving our strategy," he said.
