Global lesson in technology and regulation

The world of technology, financial services and cyber security move so fast it can be difficult to keep up with the latest developments.

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One way to gain new insights and intelligence is to look to our counterparts in other parts of the world.

"In my conversations with Barclays and HSBC – two of the UK’s biggest banks – it was clear they’re being asked how they’d respond to a pervasive cyber event – across a range of essential platforms and functions.”

I’ve just returned from a whirlwind study tour connecting with 16 different UK and US-based companies – in both the technology and finance industries.

Among my most significant takeaways was what appeared to be a simple change by the Financial Conduct Authority (FCA), UK’s conduct and prudential regulator, is having profound impacts in that country.

And, there is a likelihood that a similar regulatory ramp up will follow soon in Australia.

Regulatory ramp up

In my conversations with Barclays and HSBC – two of the UK’s biggest banks – it was clear they’re being asked how they’d respond to a pervasive cyber event – across a range of essential platforms and functions. What will they do if their core infrastructure, Windows or Linux, desktop, active directory or other functions were out for a week?

UK banks are in the process of preparing responses to the FCA. The kicker is this - the highest benchmark will set the standard for the rest of the industry.

The approach is driving innovation and heavy investment among the big banks. A potential unintended consequence is intensified competition. While they were happy to meet and talk with us, interactions between the local players are now fewer and further between.

The idea of a high unifying benchmark for the industry makes sense when we consider the interdependencies; one has only to think of the recent problems Optus experienced and how their service issues created problems across multiple industries.

It’s not hard to see why this is important for a major bank. Think of our domestic payments platform and the many payrolls ANZ manages for large employers. If that engine stalls for any length of time it has significant implications, and not just for ANZ customers.

Similarly, in New Zealand, we bank nearly half of all account holders in the country across individuals, businesses, large corporates and government. Any problem for ANZ may can quickly become a problem for the New Zealand economy.

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AI and data

One other topic that featured in every conversation was generative artificial intelligence.

It is fair to say it has been a big year for AI, but it is now moving from hype to value. The three key areas are: improving knowledge (and access to knowledge), automation processes and (related) process efficiency.

Amid this movement ANZ has taken positive steps, including establishing our AI Centre for Experimentation, rolling out GitHub CoPilot to 1000 engineers and building and training our own version of Chat-GPT (called Z-GPT) which will be launched internally in 2024.

Data also came up in many of my conversations – but the aspects are changing rapidly. For example, what we call a data mesh is the “new black” for many of the companies I spoke to.

Data lakes - think massive, centralised data stores - may have been on everyone’s wish list a few years ago, but it’s all about data meshes now.

A data mesh allows a decentralised approach to data architecture, allowing different teams to manage and contribute data, which increases sharing and efficiency without compromising governance and security.

The curse of customisation

For those who haven’t yet heard the mantra: “Run it out of the box,” take note. I heard this again and again. But what does it mean?

There is a danger in thinking you’re special and you have to customise solutions. Increasingly, this choice will close companies off from innovation and agility as platforms grow and adapt. Worse still, companies will commit to expensive and low-value development, testing and deployment when they do want to implement change.

Speaking to SAP in San Francisco they told me (I’ll paraphrase): “We’re losing patience with folks not turning on the features we’re shipping”. The solution is simple, they’re going to be more assertive and ship updates with features on.

More and more our experience as consumers of these platform solutions will be akin to the experience of a smart phone user – waking up to some new features following an overnight update.

The right path

These kinds of study tours can either validate your thinking or give you a moment’s pause. While I gained many valuable insights and observations, there were no big surprises. I came away thinking ANZ’s technology strategy is sound, with no need for a rethink.

But there are larger points worth reflecting upon. At ANZ, our people are our differentiator. As the saying goes, culture eats strategy for breakfast and ANZ has worked hard to become a purpose-led organisation.

On numerous occasions that purpose has helped make clear which path to pursue. It also assists in attracting and developing people. In the end the calibre of our people and the solutions they design and deliver will set us apart.

Above all we value the curious, tenacious and adaptable. And a little humility and empathy doesn’t hurt. Big businesses must come together to share and exploit tech platforms in order to deliver powerful, valuable solutions at scale.

In this new world if we are to continue to transform large organisations - the different parts must work together more closely. And that is a world we are well prepared for.

Jo Hayes is Divisional CIO, Group Services, Technology at ANZ.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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