Just a few years ago we were talking about the gap between digital natives and digital immigrants. Well, that gap has all but disappeared and that is why it is wrong to talk about a traditional bank and a digital bank. Technology is banking, it underpins everything today. It underpins our management – ANZ has three employees on our Executive Committee with a technological background. Our chairman has a technological background.
In the past 12 months, some distinct trends have accelerated. This strategic plan for five, ten years? It is happening now. Over the past year – and this applies to all segments of the population, not just a specific age group – people have become more familiar with technology, whether they’re staying in touch with families, online shopping, or financial services.
When we looked at our mobile banking application, about 450,000 people signed up and used the app for the first time last year – in addition to the millions who have already done so. That was at a time when we were locked. From a usage perspective, we saw an increase in activity in the app by 20 to 23 percent. That means that people interact with your application three million times a day – roughly a billion interactions per year.
So when we think about the bank of the future, we need to be clear about what is already happening today.
This became apparent on March 13, 2020, when we were forced to work from home for 95 percent of our population indefinitely. If we had said about a year ago that this project was going to get everyone to work from home, let’s think about the technology, think about the legal components, think about the legal aspects, it would have been a monumental one Project that would never have been carried out.
But we did it. In a very short time. And the bank kept working. We were surprised at how well we did during this time, and this reinforced the need for an adaptable culture, a willingness to learn quickly and a willingness to try things out. Yes you will fail. Things will go wrong, but learn quickly, adjust again, move on. That is the culture of the bank of the future that we have built. It’s quick to customize.
After the past 12 months, we now believe that we can move a lot faster than we thought. That said, when you do your strategic planning, you can set much more ambitious goals for yourself instead of looking at three or four years. We’ll be able to get where we want to go faster. And we realize that we can’t do it alone. In the past 12 months we’ve seen what we can do. The challenge is to bottle this to institutionalize that speed and adaptability.
Promotion of talent at the grassroots level
It is important to recognize that this accelerated development of the past 12 months also affects our employees and how we think about running our bank and attracting talent. Broader skills are required not only on the Executive Committee and the Board of Directors. Whether you’re a banker or work in retail, telecommunications, or healthcare, just like our customers, who have quickly gone through a learning curve over the past year, this has happened to employees too.
Employee expectations differ significantly. We saw that they were using Microsoft Teams or whatever collaboration suite you are using. As a modern day banker, you expect the technology to enable you to interact and collaborate both internally and externally. And you must have data. You want to be able to access the information you need, not just about the customer but also the market, about competitors, and you want to be able to do it in a flexible way – because we know, as far as the office to work, that also changes.
How do we make sure I can access this information? As a regulated company, ANZ has to manage privacy. We need to ensure that, for a compliance perspective, we are using technology from partners like Salesforce that we have taken the effort to ensure that their components are compliant with our regulators’ requirements. Our customers want to know that they can trust the services they use. That means we have to use technologies that meet the highest standards.
We now know that Australia wants to compete on the world stage when it comes to technology, and there is a shortage of tech talent. So how can we nurture our own talent at home? That too comes back to the balance between what we buy and what we build. ANZ hired 200 tech graduates in 2020, compared to 80 in 2019. These numbers speak for ANZ’s commitment to nurturing talent at the grassroots level.
There is a tremendous opportunity to build technical skills and abilities within the industry and we look forward to creatively building talent for the future of ANZ. A fantastic example of this is our Spectrum Program, which allows people on the Autism Spectrum to work with ANZ to develop their unique talent. Of course, we go out of our way to hire great people when needed, but putting together teams with different talents and backgrounds remains key to our strategy of building a more adaptable and resilient bank.
Our philosophy is that no one will be able to master these challenges alone – no one can do everything and do it well. We will work with large system providers like Infosys, with Bigtech like Amazon and Microsoft, with specialists like the payment giant Worldline and with fintechs.
Much of the early comments on emerging fintechs focused on identifying the traditional banking institution’s cause of death. That narrative has now shifted to one that recognizes the value of partnerships for both parties. As with many technological endeavors, it is very difficult to just buy something and fit it into an organization and suddenly change. Because of this, we continue to strive for solid partnerships with companies such as Atlassian, Google and Microsoft, as well as other financial organizations.
An important belief is that the architectural approach must be modular. Not just for financial services, but banking in particular, the idea of a monolithic stack from a single supplier just won’t work in the future. That means we are looking for key partners who provide an important component – possibly in the area of customer relationship management, core book, mobile banking component or even in some important workflow areas. However, what I increasingly expect, and certainly the approach we are taking within ANZ, is a modular environment with five or six essential components.
Other elements could come from a niche partner. Some we could build ourselves because we think there is a difference. However, all of this means that there is a technology ecosystem there, with large established partners as well as the smaller players and the ANZ technology teams. And they must all be able to work together to solve some pretty important problems, and do so at an incredible pace.
We have ANZi that deals with venture capital opportunities and partnership opportunities. We have our Business Lab area where we help come up with some pretty interesting ideas. These efforts allow us to work very closely with some really, really smart people who are doing some incredible things that will get small businesses started, and help streamline things like cost, management, keep taking the friction out of the home ownership process. These are all things that we are exposed to through partnerships that complement the core products that we have in the market.
Adaptation to a better bank
Our customers’ needs change so quickly that we don’t have the luxury of spending three years building a huge project and then unveiling it – because the world has changed. We have to be that adaptable organization so that we are able to work in a way that quickly picks up signals from the market, from our customers or competitors, where we just learn something and react or innovate in advance. You never know exactly where the next stimulus will come from.
Even before 2020 we knew that innovation and transformation had to remain fluid. A fixed five-year strategy does not allow the adaptability that is required to transform an organization. However, if you have the right systems, if you have the right teams, if you have the right external partnerships with forward-thinking organizations, you can create an environment that is adaptable and constantly changing to meet the challenges of the future.
And that’s essentially the bank of the future – it’s not a noun, it’s a verb.
Gerard Florian is Group Executive – Technology at ANZ