I joined ANZ's board as they visited Silicon Valley earlier this year to see how companies disrupt, deal with disruption and transform their businesses. What we had confirmed for us – and it's not 'news' – is that the customer is key.
Start-ups have the ability to place the customer experience at the centre of their thinking. We too need to do this – we need to translate this from a long-held positive aspiration into consistent reality. Innovation is not just about creating a digital bank – the real challenge is building a business that understands the customer and can quickly adapt.
Disrupters and start-ups are simply business people who see a need and provide a service. Customers demand convenience, and if history tells us anything it's that service expectations never fall. Banks need to be just as good – or better – than other service organisations and the rising Fintechs.
Unlike the old dot.com days the barriers for entry now – thanks to new technologies – are no longer as high. Investment money is plentiful and more and more organisations will start playing in this space unless banks step up and give our customers what they're looking for.
We can't use our incumbency, legacy systems, regulation, and old operating models as excuses. Our customers, investors and the regulators expect us to be good all round.
While we need to be competent at everything, we also need to have a laser-like focus on what makes each of us great. I've seen many examples where large organisations eventually end up producing products or services that are too internally focussed, expensive, or complicated for many customers to adopt.
Every five years or so banks decide they need smarter people and they hire from Silicon Valley – and most often these hires fail because the corporate 'immune system' chews them up and spits them out.
This time in Silicon Valley I met many people who were former bankers – they were there because, as bankers, they know about compliance, processes and how to deliver in a regular repeatable way.
Some people think this is old school, but frankly, it's what works. Blending that discipline and focus on execution with speed, agility, and testing is crucial for success. However, being innovative and agile does not mean quality can suffer.
You can't say to a banking customer “we'll get your statements correct 10 times out of 12”. You can't say to a business “we'll probably process your transaction correctly this week”. Few things are more critical than financial transactions and getting them right.
THE MIDDLE GROUND
As banking institutions, the middle ground is where our opportunity lies. We are a trusted provider, to consumers and small businesses through to the largest global companies. Not everyone can be excellent at everything but we have the opportunity to be better than we are.
I think that it's in our hands to determine whether we'll be disrupted or stay relevant over time. Well make that choice by how customer-focussed we are and how driven we are by customer experience.
How do banks stay current? We can start by fostering a diverse work force, innovating from within, and leveraging the value-addition from external partnerships we will stay current.
We will need to flex our organisational and governance models and applying the transformation not just in technology but across the enterprise. By knowing what our customers want, by understanding the data we have and by continually transforming and adopting digital processes.
Given all that, I see more opportunity than threat.
Scott Collary, Chief Information Officer, ANZ
This is an edited version of the speech Scott made at a Trans-Tasman Business Circle event in September.