ANZ Bank COO believes culture is key to digital transformation. Source: Shutterstock

ANZ Bank COO believes culture is key to digital transformation. Source: Shutterstock

ANZ Bank COO on digital transformation, culture, and innovation

WHILE digital transformation is a challenge for all kinds of businesses, banks seem to have the odds stacked against them.

Not only do they need to upgrade legacy infrastructure that’s core to their workflows, but also comply with stringent banking norms and new regulations around data privacy and protection, while also meeting rising customer expectations in a digital-first world.

In the institutional banking space, the demands are a tad bit higher as organizations (institutional clients) are looking for banks to support their own digital transformations.

ANZ Bank seems to be delivering on expectations reasonably well. Up until last year, for five years in a row, the organization ranked #1 for relationship strength in the institutional banking space.

In an exclusive interview with Tech Wire Asia, ANZ’s Institutional Banking COO Sreeram Iyer discusses what’s been top of mind on the bank’s journey to digital and what it’s looking to do in the future.

“Firstly, the banking business context in most markets is one where returns and margins are declining, customer expectations are skyrocketing, and regulatory demands are rising.

“At the top of the house within the company, business strategy and the right people culture should, therefore, precede technology and digital pathways. This is often a challenge.”

Leading a bank that excels at building and nurturing relationships with customers, people culture is obviously top of mind for the COO and at the center of the digital transformation movement.

McKinsey consultants, in various studies and articles, have emphasized the importance of culture — often pointing to it as one of the key pillars of a successful digital transformation.

“As digital requires new ways of working as well as changes to the organization’s overall culture, employees must be empowered to work differently and keep up with the faster pace of business,” McKinsey’s Unlocking Success in Digital Transformations points out, for example.

Iyer understands that, which is why he emphasizes fostering a growth mindset among staff at ANZ and encouraging them to be open to new ways of dealing with technology and other disrupters in the industry.

Doing so not only helps the organization delight customers but also ensures that employees always have the most efficient workflows and tools to support them in their daily tasks.

“A bank’s digital transformation journey must aim to lift both, customer experience (CX) or their employee experience (EX).”

Not just efficiency, ANZ is betting big on innovation

“Achieving greater efficiency and customer focus is only part of the transformation battle. The big win is driving better innovation, as it creates strategic advantages,” says Iyer.

Iyer emphasizes the need for innovation because small wins, says new platforms or applications, can quickly be replicated by competitors if the idea wows customers.

It’s why the bank set up an innovation lab in Australia way back in 2015, investing AUD450 million (US$315 million) into the initiative — and then followed it up with an innovation lab in Singapore the following year — at the heart of the APAC fintech ecosystem.

ANZ has an innovation lab in India as well, Iyer highlighted, sharing with Tech Wire Asia that the innovation labs are staffed with skilled professionals working on exciting technologies such as artificial intelligence and developing valuable intellectual property using machine learning.

While the bank works with fintechs — “[…] we have made huge progress on how to partner with fintechs in the recent past — but is keen on innovating with machine learning to unlock new opportunities.

“Machines have become much smarter. The ability to digitize, read, interpret and suggest a course of action are now core capabilities of technology platforms that we have.

“We realise that once you build internal capability, you need less and less human intelligence to make the machine more and more intelligent.

“We have actually gone ‘live’ in many areas — in the trade division, for example, we have many instances of machine learning-driven innovation and see marked improvements in productivity, faster turnaround, and much better customer and staff experience.

While excited about innovations, Iyer reiterates the importance of people and culture in the business.

“Implementing a multi-year automation agenda including reskilling our people to be digitally literate – focus on creating digital minds (ABCD of banking),” highlighted the COO.

The ABCD Iyer is referring to, of course, is artificial intelligence, blockchain, cloud, and data.

Since the bank is keen on motivating large teams to adopt digital automation while driving up productivity, training staff on technology as well as new innovations will continue to be critical for ANZ.