BEHIND THE NUMBERS: a new era of digital mindset banking

Peter Dalton & Wayne Spiteri

Business Lead & Engineering Lead, ANZx

It’s no longer a shock to appreciate banking is undergoing more disruption and more rapid, fundamental change than at any time since modern banks first emerged in 17^th century Italy.

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Pic: Inside ANZ's Melbourne-based headquarters

The internet, digitalisation, the data revolution and competition from nimble startups and huge technology and social network organisations are driving massive transformation and an existential threat – and opportunity.

"ANZx is a growth-oriented strategy and it takes the best technology and a fintech mindset and applies it to our already strong brand and customer base.”

That opportunity lies in leveraging digital solutions, data and human-centred design for a better customer – and employee – experience.

If we think back to more recent history – ten years ago to be precise – ANZ pioneered digital banking on modern-day technology in Australia with the launch of goMoney, among the first banking apps to be released in Australia.

Looking ahead, ANZ will once again break new ground in the digital banking world in Australia with the progress of the ANZx program of work set to deliver for our customers now, and well into the future.

When thinking about how to do this, traditional banks like ANZ face three broad choices if they are to hold onto their customers and drive longer term value propositions.

They can adopt a mindset of continuous improvement of existing platforms, products and services – minimising disruption but ultimately leaving themselves vulnerable to the new competitors.

They can start anew, building (or perhaps buying) a modern, digital bank from scratch, leaving legacy challenges behind in an “old” bank which is eventually allowed to wither.

Or they can modernise from within, simplifying platforms and offerings, dramatically improving customer experience, creating a fundamentally different customer proposition on modern systems that are both digital and in-person.

There are obviously pros and cons for all approaches but having now spent some years analysing these trends globally and better understanding our own business, it is this third approach we have adopted at ANZ with our ANZx program.

This program has been in progress for two years and it is not just a set of reimagined products but a better digital capability, a digital “mindset”, and a radical improvement for customers.

ANZx is a growth-oriented strategy and it takes the best technology and a fintech mindset and applies it to our already strong brand and customer base. The ANZx mission is to build a substantially better, a measurably better, Australian bank.

The ANZx program is now moving into a new phase with the adoption of a range of propositions under the brand ANZ Plus, focused on improving our customers’ financial wellbeing.

Retail customers in Australia will soon see the first product and service initiatives of the new ANZ Plus customer proposition but they are only the first, more visible signs of this multi-year program of transformation.

Our transformation goals are focused on the delivery of:

A small number of purpose-led propositions that people love to use.
A digital mobile and in-person distribution model.
A simplified, high integrity, highly automated digital platform.
A customer-centric culture and leading workplace.

We are investing heavily in this transformation, improving the use of data and analytics, innovative strategic partnerships, a refreshed brand proposition, digital solutions and a radically better user experience.

The first step – and one we believe truly captures the essence of ANZ Plus – is the launch of a new way to bank that helps people to manage their money better by spending less, saving more and building healthy money habits. It is an initial step in a multi-year roll out of what will eventually become the cornerstone of how our retail and small business customers bank with us in the future.

Initially ANZ Plus will include, among other things, an intelligent mobile banking app, two reimagined bank accounts, and access to coaches – all designed to help our customers improve their financial wellbeing over time.

As ANZ Plus rolls out, our aim is to become a more efficient, lower cost but, more importantly, a more focused and more customer-focused institution.

We are modernising and simplifying what we do, reducing the number of systems we operate, cutting the length of terms and conditions, and using the right tools and technology to build a modern, quality, automated, digital experience.

For example, the ANZ Plus app seamlessly integrates two simplified accounts while allowing customers to organise their savings and their everyday spending. Customers can set and track multiple goals without having to open additional accounts – something you cannot do today with many traditional savings accounts.

Our focus on mobile-first banking and self-service doesn’t negate the continued importance of real people. While the app is designed to allow customers to serve themselves in most circumstances, customers will be supported by “coaches” - experts in our approach to financial wellbeing who can provide support at a time convenient to our customers. Initially, this help will be available via in-app chat, video call or over the phone.

Underlying these customer-facing initiatives is a generational change in our technology platforms. Critically, we are not replacing our core systems - we are essentially making them much simpler and building a small number of modern features within.

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In ANZx, our first technology goal is to build a highly automated and highly integrated technology stack utilising both modern digital platforms and custom-built services, leveraging a simplified core.

This transformation is based on two core principles – Cloud-first and Application Programming Interface (API) enabled.

These two guiding principles allow us the greatest level of agility, speed and safety, meaning we can deliver modern, reusable, customer-centric propositions which we are able to change with the needs of our customers and coaches.

Our cloud-first approach enables the ANZx team to utilise best-in-breed software as a service (SAAS) products such as Salesforce and Twilio as well as build differentiating customer propositions at speed.

Our second principle was to ensure functionality could be available from within our platforms to all channels and built only once. We therefore mandated all systems provide a system contract and are designed as a reusable business capability. It helps ensure we don’t get functionality drift between what customers can undertake themselves and what our bankers can perform.

We have organised our architecture into eight capability layers and across these layers we have decided to either build, buy or leverage existing platforms. We have bought best-in-breed platforms where a commodity service is needed and built solutions where we believe we can obtain competitive advantage. In both instances we ensure they employ modern architecture frameworks and are built in line with our fundamental technology principles.

For example, we’ve built our own digital banking platform, Fabric, which is one of the core pillars of our modern and modular technology stack. Early on, we looked at solutions for our internet and mobile banking and we decided that instead of working with – and being constrained by the user interface of - a partner we would build our own digital banking platform. We believe our mobile and internet banking experience needs to be completely unique.

Most importantly, we will leverage existing ANZ platforms where they are fit-for purpose.

We are also simplifying our core systems. One of our major goals is to have less than 10 products on our core system as well as radically improve our time-to-market and implement a product catalogue and pricing engine to help ensure our products are compliant with regulation.

By introducing this cross-product layer and providing a common product repository for the bank we simplify the core.

Finally, we’re automating our key critical controls to help ensure we are compliant, secure and safe. This will come to life through our custom-built digital monitoring and alerting tool ‘Xplore’ and a control repository known as ‘Codex’. This will enhance our visibility of the processes, risks, obligations and controls we manage across the program and that will help us be aware of, and resolve, an issue before a customer alerts us to it. A simple example would be to monitor terms such as “you must be older than 18” to acquire a product.

This digital transformation we are undertaking with ANZx is large and complex, covering many hundreds of products, processes, systems and customer segments, so it needs to be sequenced into meaningful phases.

From the customer perspective, as ANZ Plus rolls out, there will be new livery in those stores where customers can obtain support and coaching when needed, in the financial wellbeing features rolling out in the ANZ Plus app and with customer insights.

Central to our thinking with the ANZx program and the ANZ Plus proposition is the recognition banking is rapidly changing, competition is across multiple fronts and customers demand an experience banks have traditionally not offered. This is not just about products and platforms, it is about creating a flexible, adaptable and efficient bank which can rapidly respond to a constantly changing environment.

That in turn is all in support of ANZ’s purpose and strategy which is to improve the financial wellbeing of our customers.

Peter Dalton is Business Lead and Wayne Spiteri is Engineering Lead at ANZx

This is general advice. It might not be right for you. Please consult the ANZ Financial Services Guide.