05 Aug 2015
Smith gave BlueNotes publisher – and head of group communications – Paul Edwards a mandate to transform the bank from a traditional closed and locked down institution to one where its staff, customers and other stakeholders would interact in a more modern way.
"The next phase of the technological challenge will rely on culture rather than new technologies or platforms."
Andrew Cornell, Managing Editor
And not just modern but irresistible. Even if banks globally still yearned to hold all information behind locked doors and not allow their staff and customers to interact on Twitter or Facebook or LinkedIn or WeChat, the world was going to do it anyway.
BlueNotes' existence is one strand of that shift, a recognition the media too is changing and organisations can no longer simply rely on third parties to publish quality content about them and their fields of interest.
The ANZ board and a team of senior management have just been back to Silicon Valley. So what now? Another massive transformation of bank communications? Another BlueNotes? A seismic shift in the plates of technology?
One response is already public: the bank announced Tuesday the establishment of an international panel of technology experts whose role is to provide advice to the board on the “strategic application of new technologies and on emerging technology, digital and social media trends that affect the bank's business and strategic direction”.
ANZ Chairman David Gonski said: “The financial services industry is now undergoing rapid change driven by advances in digital technology. The aim of establishing this advisory group is to ensure the board and management have access to external perspectives, specialist insights and trusted advice to ensure we successfully navigate future opportunities and challenges.”
Gonski and Smith will no doubt be asked why this is a board initiative and while they will obviously explain further, the decision reflects a quite profound shift in emphasis in the technology realm over the last two years.
One of the major shifts has been a recognition by boards globally that technological disruption is not just an operational or management matter, it is a core governance issue and beyond that a profound strategic issue – two clear prerogatives for boards.
My finance colleague here, Shane Buggle, reminded me of something from Albert Camus’ existential novel The Plague which summarises this perfectly: “What was more remarkable was the way in which, in the very midst of a disaster, an office would carry on working and take initiatives appropriate to a quite different time , often unknown to the highest authorities, for the simple reason that it was designed to operate in this way”.
In 2013, there were some very clear answers to the question of what should a bank do about technological disruption: be digital and be social. From those answers, major projects were launched.
In 2015, the lessons from Silicon Valley, going not just on what ANZ people have said but many others, boils down to “think differently”.
The next phase of the technological challenge will rely on culture rather than new technologies or platforms. It is one thing to have allowed access to external social media or have set up internal collaboration tools, it is another to have the governance structures in place so that insights and ideas stemming from these platforms are recognised and utilised.
The make-up of the ANZ International Technology and Digital Business Advisory Panel reflects this. Its members are: Aliza Knox, Managing Director Online Sales, Twitter Asia Pacific & Latin America; Don Kingsborough, former Vice President Global Retail and Head of Strategic Development, PayPal; Filippo Passerini, former Group President Global Business Services and CIO, Procter & Gamble; and Gerard Florian, Senior Vice President, Strategy and Engagement, IT as a Service, Dimension Data.
Boards have a role to set the culture at institutions and there is a governance role in helping an organisation “think differently”.
This may not be precisely how Gonski or the board or Smith perceive the evolution but it is implicit in what is being said.
At an internal report back to staff on the trip, ANZ chief operating officer Alistair Currie said “we built foundations but we are at a point in our development where it is time to refresh our thinking and figure out what we are going to do next to build on this position”.
“Digitisation is not just about shiny toys and technology: the implications run much further, wider and more deeply than that.”
Currie spoke of the role of financial technology start-ups, big data, cloud computing, third party collaborations. He noted there was no “silver bullet” in the technology race but the race was speeding up, fuelled by investor money, the same technology advances available outside the valley being used to generate more new ideas, a real sense of accelerate or get left behind.
And there again is a challenge from the technology world and again it is a cultural one. Banks historically have not been good at transforming into something different. For every Mellon Bank which shifted from banking to wealth management, there have been banks like Lehman Bros and Barings blowing themselves up in new markets.
So while banks must learn from Silicon Valley, must certainly learn how to partner with exciting start-ups, banks are not venture capital firms. Some banks are starting to add VC arms and it will be a challenge for boards to determine whether it is better to fund, buy or partner with the providers of new channels of opportunity.
Nor is everything coming out of the valley desirable. And not just those costly strategic dead ends.
ANZ's head of human resources Susie Babani made the point at the report back that she was often one of only a couple of women at meetings. The tech world is still overwhelmingly male.
It is something many have criticised and solutions are being tried. But as Babani said “it's shocking. Shocking. Cultural mix, much stronger, very strong. Gender, I barely saw four women in the whole week. It was tiny, even when you looked around”.
Monocultures are not good for business sustainability and while the tech industry is culturally diverse it is another governance challenge not to import the gender skew along with the capacity for innovation and recovery from failure – because history shows us male corporate cultures have far higher incidences of operational risk, whether that be rogue trading or failing to harness a broad talent mix.
Just how companies respond to the cultural challenge of technology disruption will be one of the key differentiators.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
05 Aug 2015
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07 Aug 2015