The bank we’re building starts with the customer’s needs and works backwards from there. That’s a different way of thinking to how banks have traditionally worked.
We are thinking about our products and services and how we can design those from the outset so they improve the financial wellbeing of our customers. In the past, while banks wanted to serve their customers, they were prone to creating products and offering services and said to customers “here they are, we hope they work for you”.
Once you start to design products and services to meet customer needs and improve their financial wellbeing, it follows you can better assist customers by providing their own data to them in a way that more fully informs decisions they make about their finances and lifestyle.
With the customer’s consent opportunities exist to share more than one data source in an integrated way. So this plays a part in how we think about the partnerships we sign up to and the new propositions that might be built. Distribution too becomes increasingly digital, enabling us to progressively and much more quickly add features that will help with our customers financial wellbeing. In that sense we are constantly building the bank. If we compare ANZ Plus with a more traditional bank product, the underlying focus is improving our customers’ financial wellbeing. It builds on that idea that customers don’t want a home loan they want a home. Customers don’t just want a transaction account, they want information about their lives to help them make better decisions.
With this approach, one that is data enabled and built around supporting the customer’s needs, the bank we’re building is not just about a single proposition or a few propositions, it is about tailoring the propositions to track our customers’ needs and that in turn deepens the relationship – which is a more sustainable model for our shareholders.
This will be an increasingly integrated experience. It is about ecosystems, and about partnering with others who offer our customers what they want but which we choose not to provide ourselves. You need to be able integrate this across platforms so the platforms are a critical part of what we are doing. To use the rails and trains analogy, where ANZx is providing the rails and ANZ Plus runs on them, as the customer travels we can add extra carriages as they want. That might be some very targeted financial support, it might be around the most suitable credit card, and that level of support we have just not been able to provide previously.
To go back to a customer who wants a home, not a mortgage, that ecosystem might play across a first home, an investment property, a sale, there are those other elements like energy use, insurance, property management, renovations. This is not just providing a financial service it’s providing crucial support throughout the lifecycle of home ownership and our relationship with our customers will become much more sticky - we have longer, more valuable relationships with those customers because we help to improve their financial wellbeing.
I think our people deeply understand our purpose and, more importantly, they really support our purpose. For ANZ Plus, the whole motivation fits our purpose. It is culturally aligned. It is a deep and rich expression of that purpose. And that alignment between purpose and the bank we’re building is critical.
So how does purpose affect decisions in real life? Well, I think our attitude to “buy now, pay later” schemes is one example. We just don’t think this product, as it stands, is in the long-term interests of our customers’ financial wellbeing. Cryptocurrencies are another case. There’s certainly an interest in cryptocurrencies, and no one is arguing they’re not a very high-profile asset class. But are they something we as a bank should be endorsing at this time given the volatility and insecurity around them, the state of the systems and their financial soundness? We’ve elected not to at this stage. The point is there are lots of things we could do – but we aim to do things which are closely aligned with our purpose and that too underpins the bank we’re building.
And the bank we’re building even impacts the way we think about the types of lawyers we want to recruit. It has a direct impact on the legal function in many ways. For example, in our Institutional Legal team we are not just looking for banking lawyers, we are hiring lawyers with a deep understanding of sustainable finance. We are building out the depth of our expertise in climate change, and making major investments in our privacy and data legal team.
Our opportunities in the future will not just be organic, there will be mergers and acquisitions opportunities. But when we are looking for M&A lawyers they have to be able to work with the business to ensure we can deliver on the propositions we could offer our customers if we went ahead with a transaction. They need to be able to understand how both sides of a transaction can benefit from a structure, adding to both businesses. It is 1 + 1 = 3 we’re looking for. That’s a different skill set. We need to be able to say if we pursue this opportunity there are propositions we could offer customers that we can’t offer now.
The Pollination investment was a perfect example of this. We could see how both businesses could benefit from this and how much more we could offer customers.
Ken Adams is Group General Counsel at ANZ
Find conversations with ANZ’s Executive Committee on the Bank We’re Building series page