ANZ finds savings and security benefits in technology estate simplification

ANZ Banking Group’s technology estate simplification saved the bank $62 million in six months, with technology overall helping the bank deliver its highest level of productivity benefits since a renewed focus that started in 2019.

The bank’s half-year results - covering the six months to the end of March 2024 - highlight the expanding role that technology plays in customer service and business growth.

CEO Shayne Elliott said that “none” of ANZ’s investment in growth “is possible without productivity” -, particularly the $1.5 billion in savings the bank has delivered since 2019.

During the half, ANZ said that technology simplification - “through ongoing migration of applications to the cloud, software vendor consolidation, automation of engineering processes and lower network costs” - delivered $62 million in savings.

ANZ had 48 percent of target applications on cloud as of the end of March, up from 37 percent a year ago.

It found another $36 million in savings from “digitisation enabling self-service adoption [and] automation of messaging interactions”, among other initiatives.

CFO Farhan Faruqui said that productivity “is improving customers’ experience, allowing them to engage with us via their channel of choice.” 

“For example, in Australia retail, close to 1 million conversations were undertaken through our ‘Message Us’ capability in the half, up 58 percent, with 40 percent of those conversations not requiring banking support,” Faruqui said.

In banking services and transaction processing, another $15 million in savings were found through “automation of customer onboarding, home loan process automation, improving workflow and decision-making, [and] system rationalisation.”

That put total savings in the half directly attributable to technology investment at over $110 million.

The technology workforce

Faruqui said that full-time equivalent (FTE) staffing levels in the bank’s “higher cost locations” were reduced by 350 in the period.

He attributed the reduction directly to the bank’s actions on productivity, including “ongoing optimisation of our footprint, technology simplification and continued investment into automation and digital channels.”

Elliott also pointed to the increasing role that offshore staff play, particularly in the bank’s technology operations.

“Optimising our workforce across 29 markets is also key to efficiency,” Elliott said.

“We have the largest offshore operations and technology capability of any Australian company with 10,000 colleagues across Bengaluru and Manila, who augment our skills in cyber security, transaction processing, sanctions checking, engineering, judgmental credit [analysis], generative AI and predictive analytics, and they will have an increasingly important role to play as we grow.”

AI has a role in Suncorp integration

ANZ has been public with its focus on AI, whether that be to aid internal software delivery, intelligence gathering, or to find answers for customers faster.

More of the bank’s AI work surfaced in the half-year results, including a role for generative AI in the integration of Suncorp Bank.

“We’re piloting a generative AI tool to radically reduce the time to compare, contrast and harmonise thousands of terms, conditions, procedures, policies and contracts of Suncorp Bank and ANZ, which will accelerate and de-risk integration,” Elliott said.

Generative AI capabilities are also set to be folded into ANZ Plus, whose digital platform will be the new home for Suncorp Bank customers.

“We will build out propositions on Plus to match and exceed Suncorp’s services so we can safely move their customers to ANZ, leveraging scale and maximising synergies,” Elliott said.

“Looking ahead, we’re already exploring and piloting generative AI across ANZ Plus to provide better tools to manage money, resolve enquiries, provide property valuations and to detect fraud.”

The return of the Falcon

Last month, ANZ resurrected Falcon, branding it first used back in 2006 to describe security protections against credit card fraud.

Security received top billing in ANZ’s half-year results, commanding the third slide of the bank's presentation deck just behind its financial results.

Elliott said that technology simplification is helping ANZ with its security posture and ability to “support customers by keeping them safe”.

“We’re ready and able to help those in need with the right tools at the right time to keep them safe from criminals, hackers, and scammers,” he said.

“You may have seen our latest ads with the return of our hugely popular Falcon, but also an anti-fraud system flagging suspicious transactions. The ads are fun but they carry a serious message about extra layers of security through ANZ Plus and the protection Falcon technology provides. 

“In fact, we’re adding more scam-safe controls to ANZ Plus, including disabling screen sharing, limiting transfers to crypto exchanges, and better identifying unusual activity from unexpected locations, and these efforts are making an impact. 

“And whilst still too high, it’s good to see the amount customers are losing to scams is falling.”

ANZ posted a $3.4 billion statutory profit after tax for the half, down four percent compared to the prior six-month period.