The chief executive of ANZ Bank has gone out of his way to reassure the market that the bank has a wide-ranging strategy that will guide its technology development roadmap over the next several decades — but without providing much in the way of detail about what the twenty-year journey might look like in practice.
In broad terms, mystery has surrounded the bank’s overarching technology operation since the appointment of its new chief information officer Anne Weatherston in November 2009. Since that time — and unlike the executive’s compatriots at rival banks Westpac and the Commonwealth Bank of Australia, Weatherston has remained unavailable to discuss the bank’s technology plans.
The lack of discussion in the area — shared by the National Australia Bank — has led to pressure on the bank from the analyst community, in the wake of claims by the Commonwealth Bank that its billion-dollar core banking re-development project was putting it years in front of the other banks, courtesy of its real-time banking functionality.
Yesterday at the bank’s half-yearly briefing session, the bank’s chief executive Mike Smith singled out technology as a key area of concern for the bank going forward.
“As I said in December 2007, technology is one of the key enablers of our super regional strategy, and at our recent strategy update, I mentioned that we now have an agreed technology road map, not only to take us through 2017, but to position us for the next 20 years,” Smith said.
However, unlike rivals, Smith emphasised ANZ was aiming to be a super-regional bank, focused more on the broader Asia-Pacific region, with the bank’s technology strategy to follow suit.
“This means we face very different issues to our domestic peers, and it needs a very different technology emphasis, one that’s focused on group wide customer facing systems, and systems that deliver connectivity so that we can improve the customer experience and capture greater value from cross-border flows,” he said.
The bank has therefore prioritised a number of areas in its technology roadmap, ranging from the development of a single super-regional customer view, as well as a “truly global” payments and transaction capability.
“Finally, we’re establishing what my colleagues in technology call a reference architecture which employs a mix of global and local systems,” said Smith. “Our road map also allows for the demands of each business unit, for example, in institutional, the approach is global as the nature of the business and the clients is global. In New Zealand, our emphasis is on simplification from two platforms to one, and in Australia, we’ll deliver know the customer capabilities to enable the creation of superior customer experience.”
“In Asia, technology will support the rapid growth by creating an agile technology platform that can be expanded as we grow our franchise in each country.”
The chief executive said ANZ’s total annual spend on IT at the moment was about $1.7 billion — which he said he thought was about right, and in line with what banks globally were spending on technology. However, the way that money is spent has changed over the years.
“The issue was that we were spending it very much on a silo basis and I think we were spending a lot of money for dubious return, and getting a more holistic approach, I think will make a significant improvement,” he said, noting ANZ was likely five years into an attempt to create a centre of technology excellence within its operations, making “a major investment” in the area.
“I think we’ve still got a further three years before we’ll really see the benefits come through,” he said. “But in three years’ time, I hope to be in a position to really see the difference.” Smith noted that ANZ was planning to brief the market further on its technology plans in the next few weeks.