ANZ Bank has provided financial support to the R&D programs at several Melbourne-based universities, using the joint venture partnerships to build systems that draw insights from the petabytes of data the bank collects.
The three research programs, shared with iTnews in a wide-ranging interview with ANZ chief technology officer Patrick Maes, reveal a bank looking to harness data analytics to provide superior services to the wealthiest individuals in the Asia Pacific region.
Maes told iTnews that ANZ aspires to be the ‘advisory bank’ of the future. Two of the three research projects crunch data to help the bank provide gold-plated services to both those planning retirement and to its best performing merchants.
The third program crunches the data on the bank’s spend with technology suppliers, and will likely result in ANZ choosing closer and more comprehensive relationships with those that provide it the most value.
Crunching merchant data
Maes revealed the bank has been working with data scientists at Monash University to analyse the 20 million-plus EFTPOS transactions it handles each week to gain insights into transaction patterns amongst its merchant customers.
This effort aims to allow the bank to categorise its merchant customers by industry, preferred payment methods used by customers, and measures of customer value (RFM - recency, frequency, monetary value).
“The aim is to gain insights into which are our higher-value merchants,” a spokesperson for the project said. It also helps to determine which merchants should be assigned an ANZ relationship manager.
The bank promises to turn this over as benchmarking reports to customers of its business insights advisory service.
Building better retirement planning
The ANZ is also looking to partner with a university for the next phase in a data analytics program that aims to provide better retirement planning advice to customers.
The project began as a assignment handed to five IT graduates accepted into the bank’s 18-month long rotation program. Five graduate hires were tasked with identifying ways of encouraging people to plan for their retirement.
Their brief, according to an ANZ spokesperson, was to “look for ways to make the subject itself less stressful, the information-gathering process easier, and to help customers feel more in control of their situation".
The team built a data model allowing customers to type in their income, known expenses and aspirations for the lifestyle they expect once retired, which was then combined with projections of macroeconomic factors such as the consumer price index (CPI) over the coming decades.
The prototype system then runs calculations that help customers understand the implications of their current spending and investment patterns versus what lifestyle they expect to have once they retire.
“We know that 75 percent of Australians will run out of money before they die,” Maes said.
“Financial planners tend to provide advice on the investment side, but not on the other two corners of the retirement triangle - spend management and expectation management. This really helps them understand their capacity to retire.”
The bank is now partnerships with one or more universities with a view to refining the model further and building an app or some other form of customer experience to deliver these insights to users.
Better technology sourcing
ANZ Bank’s IT department will also benefit from the bank’s partnerships with universities under deals struck with Monash University and RMIT’s Computer Science and IT faculty.
The project with RMIT aims validate the bank’s IT architecture patterns prior to biting the bullet and investing in new systems.
“Before we mandate the use of new architecture patterns, we need to prove how they will behave under different scenarios,” a spokesperson for the bank said.
“Working with RMIT enables us to explore those scenarios, so our delivery projects have high confidence that they are fit for purpose.”
The IT department and Monash University are also using data visualisations to help manage its spend with technology vendors.
The project aggregates and analyses the bank's spend on software licenses and other technology so sourcing managers can review whether planned procurements fit with ANZ’s “preferred list of partners”, and the CFO can use it to get a better feel for a return on investment across geographical or product lines.
Project managers can also gain insights into where else in the business a specific vendor is engaged, and leverage that relationship or the bank’s total spend with the vendor during negotiations.