ANZ proposes restructure to help digital efforts

ANZ Bank is planning to adopt a new structure that seperates its core operations from other 'non-banking' functions to improve opportunities to develop and acquire new products and technologies.

In its 2022 half year results, the bank revealed its intention to seek non-operating holding company approval and create distinct ‘banking’ and ‘non-banking groups’ within the organisation.

ANZ would move its innovation and investment arm, 1835i as part of the change, allowing the team to focus on acquiring and developing new technology and non-bank services for ANZ customers.

ANZ chief executive Shayne Elliott on Wednesday said the plan, a continuation of the bank's simplifcation agenda over the past five years, was the “next evolution in building agility”.

He said the new structure, if approved, will enable ANZ “to acquire, develop and grow new products and technologies that improve the financial well-being of our customers without operating within the constraints of a traditional bank.”

“We've been actively engaged with regulators and yesterday we received board approval to submit a formal application to APRA, the federal Treasurer and international regulators such as the Reserve Bank of New Zealand,” Elliott said.

Elliott said that non-operating holding companies were “a very common structure” already used by the likes of Macquarie Group in Australia, JP Morgan in the US, and DBS in Singapore.

Once ANZ has recieved approval, the “new holding company [would] be created with wholly-owned entities sitting directly beneath”, 

“The banking group would comprise the current ANZ Banking Group,” he said.

“But it would also be be a non-banking group, which would allow us to bring the world's best non-banking tech and services to our customers.”

In an ANZ Bluenotes post, Elliott added that the initial group will be “relatively small and modest”.

Earlier this year, ANZ re-merged its digital and retail divisions into one unit, with its new banking platform ANZ Plus now falling under its ANZ Retail division.

Cloud shift continues

Elliott said ANZ was also continuing its cloud migration, with one third of applications already shifted, while rolling out Salesforce as the group's single customer service tool.

“We'll see soon have one third of our applications based in the cloud, and we're well on track to get into about 50 percent in the next 18 months,” he said.

With 15,000 “colleagues” already using Salesforce, he described the platform as a “really critical tool” that simplifies the bank's employee experience, “making us easy to deal with”.

The bank has previously stated it will be aiming to keep its total cost base at $8 billion under its broader “simplifying the bank” strategy.

However, Elliott said keeping to the banks total cost base target of $8 billion “will be more difficult” now due to inflation pressures however, ““will not give up nor shy away from the ongoing need to be simpler and more productive”.

ANZ's total investment spend reached $1.043 billion over the half, a minor drop from $1.058 billion recorded in the second half of 2021.

Part of this cost saw its technology expenses increase by 4 percent to $30 million, compared to the same time last year, pushed higher by software license costs and increased spend on investment plans.

Earlier this month, ANZ also completed its first ever Australian bank issued AUD stablecoin (A$DC) payment through a public permissionless blockchain transaction for Victor Smorgon Group.

ANZ posted a half-year statutory profit after tax of $3.53 billion, up 10 percent from the previous half and a cash profit of $3.11 billion, down 3 percent compared to the six months prior.