ANZ Bank ups cloud focus with open networks for fintech collaboration

ANZ Banking Group has upped the ante in its adoption of cloud-based services in order to pursue a more flexible technology strategy, with Netflix-developed software to stop outages and the door left open to collaborate more openly with emerging fintech start-ups.

The bank’s general manager of consumer digital technology Christian Venter told The Australian Financial Review it has significantly increased its use of cloud platforms – most notably the Amazon Web Services (AWS) Cloud – to host more dynamic content on its websites and mobile apps, and was designing new systems that would allow access for data sharing with external organisations.

The move to open up systems comes amid a Productivity Commission inquiry into whether private sector organisations, including banks, should be compelled to share their data with outside organisations through a system of “open APIs” (application programming interfaces) in order to foster innovation.

It also comes as ANZ enters a new digital era under former Google Australia boss Maile Carnegie, who is in the midst of formulating her plans for the future of digital banking.

Opening up APIs would mean banks allowing potential competitors to plug directly into data sets they hold, such as transaction account activity, in order to develop new products and services.

Sharing approach

In their submissions to the inquiry, banks, including ANZ, said that sharing should happen organically through market-driven initiatives, rather than being mandated by regulations. However, Westpac was more positive about the idea, saying data sharing could provide “immense value” to society.

“If you look at the UK market they are mandating open banking APIs, I think it is only a matter of time before something like that comes to Australia, so we are certainly preparing for that behind the scenes,” Mr Venter said.

“We are building a very open API platform with developer portals that are built in a way that could potentially be exposed to third parties at any point in time … we are preparing for that and are keeping an open watch.”

In recent years ANZ has laboured under a perception that it is a tech laggard in comparison to its big four rivals, most notably Commonwealth Bank of Australia, which impressed market analysts by delivering a big money overhaul of its core banking systems.

ANZ has always maintained its systems had not needed the major heart surgery approach, and that its approach of targeting specific areas for upgrades, based on customer demand and the need for speedier performance would prove correct.

Apple Pay

Mr Venter said more recently customers were seeing the benefits of a new multi-channel platform it installed to underpin mobile and internet banking, and had warmed to its progressive approach to working with tech giants such as Apple.

“You have seen that recently we were first to market with Apple Pay and Android Pay, and we have got a regular cadence of releases now on our mobile apps,” he said.

“Our internet banking apps have all been re-skinned with full responsive design, which enables customers to use them on the device of their choice, and all of that has been built effectively on modern digital technologies and architecture that sit on top of our existing core.”

Whereas ANZ’s big four rivals are trying to encourage the competition regulator to allow them to join forces and collectively negotiate with Apple to get their own digital wallets onto iPhones, Mr Venter said ANZ was clearly acting in its customers’ interests by choosing to work closely with the tech titan.

Banks have expressed frustration that their own existing apps do everything that Apple Pay promises, but feel customers are being unfairly pushed on to Apple’s own app.

“For me it is clear that customers are voting with their phones … whatever ANZ or CBA or any other bank feels about their own apps doesn’t matter, we spoke to our customers and realised that this was something that they wanted,” Mr Venter said.

“Even though we have our own mobile wallet experience on Android, our customers wanted a way to use their Apple Watch and other devices to make payments within the native experience of that. Shayne Elliott and the various people in the organisation made the decision to do what our customers wanted.”

Global approach

Meanwhile, Mr Venter said ANZ’s cloud-heavy systems were able to take advantage of best-practice software from around the world.

This has included it adopting an automated system testing tool developed by engineers at TV streaming giant Netflix called Chaos Monkey, which runs on AWS, but can also run on cloud environments such as Microsoft Azure and IBM Bluemix, which ANZ also use significantly.

The Chaos Monkey tool essentially performs disaster recovery type tests on the network every 20 minutes, creating different problems and assessing the network’s ability to withstand them.

Theoretically its use reduces the amount of damaging banking outages that cause chaos when they hit banks.

ANZ is not the only big four bank using Chaos Monkey, but Mr Venter said it was an example of a fresher approach to technology at the institution. It will soon release new capability in its app for live chat with customer service and is investigating the expanded use of voice biometrics to allow customers to authorise larger transactions by being recognised by their voice.

“As technology moves on we have had to adapt, there is now a customer demand for everything sooner, faster, better and cheaper and so we as a bank have embraced all of those technologies and changed the way we do delivery,” Mr Venter said.