The future of the financial services industry in Australia will be dependent on banks redefining their business model, Australia and New Zealand Banking Group (ANZ) CEO Shayne Elliott has said, but to him that means being a master of one element, rather than merely good at a few.
Speaking at global payments conference Sibos in Sydney on Monday, Elliott said just turning up and being a bank is no longer a successful model.
"I think you're going to see banks look less and less alike than what we've been used to in the past 20-30 years," he said during the day one keynote. "The people that survive in that disruptive world are those that can adapt, and those that can adapt and scale at speed."
Elliott was asked what the future of banking looks like, where emerging technologies are concerned. But the CEO of one of Australia's largest four banks doesn't believe the banking sector is in a position to be able to say it's got any idea of what that future looks like.
"I, for one, don't waste my time trying to predict what that might look like, other than saying you've just got to be ready," he continued.
"The only way to be ready is to have the right kind of people who are capable of learning and adapting really quickly, who are open to new ideas, who look at other industries, who look at other professions and are curious, and take on other ideas and can translate those into things that can work in a bank -- that, of course, is the software side."
On the hardware side, Elliott said the likes of ANZ needs to have its technology stack architectured in a way that allows for new innovations.
"Even if we have the most brilliant ideas, you have to be able to implement them, so do you have the technology and the ability to move at pace and respond to that changing environment?," he asked. "That requires a different architecture in the way you run a company ... the way you get work done."
To Elliott, the driving force behind the shifting banking business model is technology and the idea of big data.
"As we open up data, as we move into open banking, as the new technology around big data the cost of digital opportunity has dramatically reduced, I think it starts to throw into doubt that model and suggests, from our perspective, the only way to win the future is to do a few things and do them really well. The question there is what are those few things?," he continued.
"I think every bank will be grappling with its source of advantage."
Addressing the House of Representatives Standing Committee on Economics earlier this month, Elliott said the reality facing his bank and others is that non-majors are growing at a rate faster than the Big Four.
"Their market share collectively is the fastest-growing part of the Australian banking system today," he said. "There are 27 new banks, I believe, seeking a licence with APRA either through the sandbox regime or actually formally seeking licences to enter in to the market. I think the competitive environment is far more intense today than it has been in at least 10 years."
According to Elliott, new players represent both a threat and an opportunity to ANZ and the other Big Four.
"One side they're clearly a threat. We have all these new banks coming with great services and offering digital this and that, and there's lots to like about those," he told the committee.
"On the other hand, I see it as a relatively small bank with 15 percent share, if we do well, if we service our customers better than we have in the past, if we invest sufficiently in some of those new services, if we're smarter and more focused on our customers than our competitors, and we use our data -- our customers' data -- to help them more effectively, I believe we can win."
Touching on the Banking Royal Commission on Monday, Elliott said it's an "interesting time" to be in the industry, saying the findings have highlighted what went wrong in the past and it is actually helping the banks to realise what needs to happen in the future.
"Australia positions very well globally in terms of digitisation, new customer experiences and the challenge is grappling with both -- dealing with really real issues of the past and dealing with cultural changes necessary and really embracing the need to transform for the new economy," he said.