The importance of the digital future to the banking industry was underlined again recently after ANZ appointed the head of Google Australia, Maile Carnegie, to a newly created role as Group Executive Digital Banking.
The new recruit from the top of Google will be responsible for ANZ's digital product development, relationship building with financial technology (fintech) partners and delivery of a best-in-class online experience to the bank's 8 million retail and commercial customers.
Notably, Carnegie is from a non-banking background and the appointment of a leading executive from a U.S. tech giant is because ANZ wants to transform much more than just its digital horizons.
Googlising ANZ
A poor staff culture at ANZ has been much in the news recently, with the regulator alleging that senior trading staff sought to manipulate a key benchmark interest rate to the bank's advantage. Elsewhere, two sacked traders are suing the bank for damages and alleging a culture where the Wolf of Wall Street movie was treated as more handbook than cautionary tale.
This kind of internal culture is the opposite of the staff culture that has been largely responsible for the roaring success of tech giants like Google and Amazon. At Google, management strategies to improve staff productivity, engagement and innovation have helped take performance and business growth to another level.
ANZ has more than 50,000 staff and Carnegie will bring the principles of Google culture that business strategists now widely evangelise as crucial for success in running tech-driven, blue-chip companies in the digital century.
ANZ's new CEO Shayne Elliott described his own vision of how the new recruit can help ANZ: "Part of Maile's role will be to shift our thinking and champion a group-wide innovation culture at ANZ based on developing and attracting service-focused, technology literate, innovative and experimental people and teams."
The strategy of building a bank from within by borrowing from the cultural excellence of Google is a world way from the old CEO's strategy to grow via a physical push into high-risk Asian markets. ANZ bank branches and ATMs are now scattered all over major Asian metropolises in a legacy to an ill-timed physical expansion executed just as the digital future was making it less worthwhile.
Digital disruption
Whatever becomes of ANZ's Asian expansion, digital strategy will remain key to the bank's customer-facing performance as a revenue growth driver in terms of customer retention, satisfaction and product development.
The bank's bottom line also benefits from digital cost savings such as the evolution of online banking and other financial services for retail and commercial customers. Mobile is also growing rapidly and there are plenty of fintech disruptors looking to win market share from the big Australian banks.
For example, powerful online-only European banks like ING Direct are accelerating their move into Australia and offering competitive savings and home loan rates as they have none of the bricks-and-mortar costs of rivals like ANZ. Other online-only offerings involve aggressive competitors in the foreign exchange space offering better rates to retail and wholesale customers, while peer-to-peer lending is taking off in the U.S. and could soon become a genuine threat to the banking activities of ANZ.
Foolish takeaway
Banking then is at something of an inflection point with the banks challenged to adapt to fintech disruptors and find cost savings via new technology, while not sacrificing customers' demands for high-quality service and face-to-face interaction.
Banking also remains one of the planet's most lucrative industries and some of the hardest running competitors for ANZ in the future may be $700 billion tech giants like Google and its army of engaged and innovative staff. Therefore, the move to bring some Google culture to the ANZ offices looks a good one, as the bank will need to meet the coming challenges head on.
