ANZ's tech implementation leads to cost reductions

ANZ Banking Group will sharpen its focus on self-service, streamlining processes and automation as it looks to reduce costs by $900 million over two years without forfeiting the benefits of its existing investments in technology.

The bank said its cloud migration plan will play a key role in driving down its cost base as implementation of digital tools will lead to a natural decline in overall banking costs.

In its half yearly results, ANZ reported its goal was to see a $1.4 billion spend on technology by 2023 which encompassed investments in cloud services, banking platforms, data storage, security and divisional platforms.

While investment reported in 2020 reached $1.5 billion, technology modernisation should lead to an approximate $200 million drop in expenditure, driven by better data management, cloud-based solutions and analytical tools.

Following in the footsteps of Westpac, ANZ chief executive Shayne Elliott said the bank is confident its accelerated strategic framework will help lower its cost base “while still supporting an investment spend at the same level as today, bringing the reported cost base to around $8 billion.”

Elliott added that while the bank doesn’t “have micro plans to solve every problem", it does “see new opportunities, particularly in the area of process streamlining, increasing self-service and automation”.

“We are building a stronger execution culture across the bank that gives us the confidence that we can further reduce the cost of running the bank, while delivering better and more contemporary services for customers, further increasing resilience, and importantly providing sufficient space for us to continue to invest for long term and sustainable growth," Elliott said.

As one of the biggest programs underway at the bank, Elliott told iTnews during a media briefing that ANZ’s cloud program is “an important part in building our speed, our ability to respond to customers to launch new products, to test new products and to do that safety.”

“It's not just about cost," he said.

"It's really about capacity to change and it's an integral part of our improving the bank for the long term.

“We’re on our way, we've got a plan. We won’t just have one provider of cloud, we’ll have two with different strengths.

“We've migrated the first capabilities and applications across, and we have a plan over the next three-to-five years for that migration.”

Other highlights from the half-year report showed mobile app users increased by 23 percent and a 26 percent increase in transactions compared to the same period last year.

ANZ noted 42 percent of its retail sales including home loans were now completed via digital channels.

Over the half-year, ANZ launched the ability to open new bank accounts via its mobile app resulting in roughly 8000 new customers signing up.

Also similar to Westpac, the bank also introduced a new ‘gambling block’ on credit cards with approximately 1000 ANZ user activating the capability in the first month since its launch.

The bank reported $2.943 billion in profit, up 45 percent from the previous half.