​ANZ bank to open credit data in 2018

Australia and New Zealand Banking Group (ANZ) has revealed it will start sharing comprehensive credit data next year, with CEO Shayne Elliott touting the move as making it easier for new and smaller banks.

Facing the House of Representatives Standing Committee on Economics on Wednesday, Elliott said his bank is working to make open data a reality by setting out a "deliberately simple and safe form of open banking" for the government's independent review, which was opened last week.

"Our suggestions provide a pathway for open data across the economy that can drive innovation," Elliott said. "We encourage the government to look at reforms that will drive safe financial innovation."

On the topic of financial innovation, Elliott was asked by committee chair, Federal Member for Banks David Coleman, whether ANZ had a view on digital currencies.

"Not a particularly well-thought-through one, I'd have to say," the CEO replied.

"I think the question here is: Is there a place for different means of exchange? Any exchange -- the piece of paper I have in my wallet that has AU$50 written on it -- is based on trust, I accept that people will accept it and will exchange goods for it.

"If people are willing to take a cryptocurrency, good on them. Obviously it has to do with trust and the regulation that sits around it. So I think there is a role for it."

Elliott, however, said he considers dialogue on cryptocurrencies "overdone" in terms of its real role in the economy, noting there is little or no demand for it from his customers.

"The legal tender we have under the auspices of the RBA is perfectly good and works really well and is pretty low cost, actually, in terms of operation," he said, conceding that cryptocurrencies do have the potential to evolve.

"Essentially, as you know very well, that's exactly where this whole blockchain idea has come from; it's come from this currency idea, and now it's morphed into, 'Gee, there may be ways we can actually change the way we operate businesses using blockchain technology'.

"I think it's a fast-evolving space, and we'll keep an eye on it."

Speaking at the SINET61 conference in Sydney last month, Nigel Dobson, GM of Wholesale Digital Transformation at ANZ, said his bank is intrigued by the cryptocurrency end of the spectrum, but said it isn't something ANZ has embarked upon.

Quickly ruling out the immediate use or participation in cryptocurrencies, Dobson said ANZ became increasingly intrigued in versions of blockchain and distributed ledgers, and as a result, ANZ embarked on quite a number of proofs of concept that Dobson called successful, all centred around managing information.

"There's a lot of glamour attributed to the transaction initiation and transaction capture, price discovery end of the value chain, but the less glamorous end is clearing settlement and reconciliation, but it is the one that's most in need of transformation," he explained.

"We saw the information sharing and security attributes of distributed ledgers being a really good fit for that end of the value chain."

ANZ has conducted a number of proof of concepts with other banks and organisations, particularly around reconciliation and payments. It also recently completed a blockchain-based trial with tech giant IBM, alongside competitor Westpac, to digitise the bank guarantee process used for commercial property leasing.

According to Dobson, the bank needs to learn more about blockchain-based technology via its traditional business before it can head further down the blockchain rabbit hole.

For the first half of the 2017 financial year, ANZ recorded AU$2.9 billion in after-tax profit, an increase of 6 percent year on year, on total revenue of AU$10.6 billion.

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