Elliott: investing for the long-term in tech, customer experience, sustainability

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ANZ’s statutory profit after tax for the full year ended 30 September 2021 was $A6,162 million, up 72 per cent on the prior year.

Elliott says the combined underlying changes happening across the world including the ongoing pandemic, digitisation and technology disruption, challenges in supply chains and expectations about climate change are creating lots of challenges but also opportunity.

“We see most of our opportunity in our Institutional business which is really well positioned around the sustainability transition but also the general levels of activity that we think are going to happen in the global economy,” he said.

On capital allocation, Elliott says the bank has remained optimistic throughout the past two years while maintaining a robust and strong balance sheet.

“It’s important that ANZ has been really prudent right throughout this. We didn’t put our hands into shareholders pockets during COVID because… of the work we had done over very many years to simplify and strengthen the bank,” he said.

“Now, the best thing we can do with that capital is invest it for the long-term growth… The next half is going to be really important just to see how the world settles down and whether we are going to see increased demand for lending and put that capital to use to drive long-term value for shareholders.”

On the bank’s home loan processing, which was a weak element in the AR&C division, Elliott admits the business was underprepared for the levels of activity seen in the second half of 2021.

“We didn’t prepare well and that’s on me…  We’ve got to get back ready for that and that’s what we’ve been doing for the last few months. We’ve been hiring more people, putting more people on the tools, getting ready for what we think will continue to be a pretty active market,” he explains.

Elliott also discussed the bank’s opportunity as the world works towards a lower carbon future – something he says plays well into the Institutional bank’s strengths.

“The amount of money sitting around the world today [and] the amount of capital being invested with an environmental, social and governance (ESG) lens on it has grown exponentially,” he says. “ANZ sits right at the epicentre of that.

“There are lots of positives for us, we’re positioned really well for it and we’re determined to make the best of that advantage because it’s the right thing to do for the environment and it’s the right thing to do for the broader community.”

Elliott concluded the conversation by outlining a major project the bank has been working on titled “ANZx” which will be known as “ANZ Plus” when launched to customers.

He explains the concept of ANZx came from an acknowledgment that the business model for retail and small business banking in Australia and New Zealand was being challenged by competition, regulation and technology disruption.

“We sat back and said, ‘there are a couple of options here – we can muddle through, patch up things we’ve got, try to stay ahead of the game. Or we could design for the long-term future and, if you will, disrupt ourselves’. And that’s the path we’ve taken.”

Elliott says the proposition is built around the concept of improving customers’ financial wellbeing with a focus on new technology and a “fundamental rethink” about the bank’s relationship with customers.

“Think of it as a fintech meets big bank approach. It’s fintech in its capability and the way it works but with the brand of an ANZ and… the strength of our balance sheet.”

You can listen to the full conversation by watching to the video above.

Andrew Cornell is Managing Editor of bluenotes