At ANZ, COVID-19 hasn’t significantly changed our direction but it has accelerated our thinking in many areas. Early on in the pandemic it felt like survival mode but now we’re into an operating state where we're learning to live with the virus. That means we need to think more aggressively about growth opportunities.
“The days of a three-year tech project that delivers all of its value at the end of year three are gone. Tech projects now need to deliver value incrementally along the way.”And those opportunities are inextricably linked with technology. We need to reinforce our existing services – traditional mortgage products, lending products, business banking products – as well as thinking strategically about new revenue streams.
This is not a new strategy but there are a couple of key drivers from a technology point of view. And these will have implications for the way we work with our colleagues in finance, risk and strategy to develop these projects.
Eating the world
Firstly, software is eating the world. We didn’t coin that phrase but we certainly believe it. Software is going to help people manage their finances in the future, save for a home or a project or whatever it might be. Software is more embedded in our bank than ever before and that has a whole range of consequences for the role of head of technology - like me - and the role of the tech function. Moreover those consequences are now equally relevant for the Chief Financial Officer (CFO) and the Chief Risk Officer.
A second driver is adaptability and the rate of change. We always knew we needed to be able to change quickly but the last 18 months has taught us that lesson on steroids. So adaptability will continue to be a key characteristic we need as a tech organisation. We don't ignore the future but you can’t plan to within an inch of your life anymore either.
A third is the evolving way customers and staff consume our technology. This is going to drive a lot of what we do within tech and will have ramifications for how we design and offer services and for the funding model that sits behind it.
On the same page
When we talk about our growth strategy and the funding model, there is a general perception of conflict between the tech function and the finance function. One is agitating for vital investment, the other arguing to keep an eye on expenditure.
Here at ANZ however those two functions are definitely on the same page. As a group, we spend a lot of time talking about the role of technology; how it's going to help finance, risk, human resources as well as our banking services.
Finance and risk are interested in the applications of this technology but also in greater transparency of cost. If you run our mobile banking application, what does that cost? Or if you run our home loans business, what does it cost to approve a new home loan?
In years past we weren’t easily able to understand that but more recently we've undertaken significant work with the finance team and the CFO to agree a common fact base. So instead of everybody having different systems and generating their own spreadsheets, we're getting to a place where we can reconcile all the data.
Finance can identify where the numbers are coming from, what the drivers of cost are and what the likely return on any investment will be. Then we can all work with our investment committee to better shape the future investment plans because we've got deeper, richer data sets.
To be sure this is still a developing muscle. It’s not something we've always done but we're getting better. One of the things that helped this process was our decision to move to a more agile way of working across parts of the business in 2017.
It was a conscious approach to have cross-functional teams throughout the company working together to solve a problem; whether that's in finance, technology, talent and cultural or in retail banking. The alignment that has brought has allowed a growing trust between those groups.
We've had our fair share of bumpy periods where systems weren’t performing as we had expected and the business very quickly wanted to know why. We’ve worked very hard to build on that trust.
Today we have a technology CFO who reports into the group CFO. That technology CFO knows our business intimately. We sit together multiple times a week to talk through where we're at from a strategy and an execution point of view.
We constantly review investment on a quarterly basis, rather than annually, to check returns against our projections. The agile mindset is important again in this context because the days of a three-year tech project that delivers all its value at the end of year three are gone.
Tech projects now need to deliver value incrementally along the way. It might be small initially and get bigger over time but there's got to be some recognition of value being delivered. And that's where finance sits with us to check in and see we are delivering what we said we would.
We’re often asked to go away and get sharper on our benefits statement so we spend time getting clearer on the commitment we're willing to make. But we’ve never ended in a stalemate, where we've wanted to go ahead with a project and there's been no money available.
Sometimes it’s managed or reduced slightly. The business approves it but asks us to start small. In the past, we'd make a request for a mega-project – seeking tens of millions of dollars. And you either got it or you didn't.
Today we operate a little bit like venture capital. The business says: get started and, assuming you show value, you can keep going. And if you can't show value, then we all agree to stop before the investment goes any further.
In this way greater co-operation between the functions and an agile approach to working results in improved outcomes for both ANZ staff and customers.
Gerard Florian is Group Executive for Technology at ANZ