​ANZ posts AU$2.9b profit as it continues focuses on 'customer innovation'

The bank has attributed its 6 percent year-on-year first half profit jump to customer-focused initiatives such as the introduction of voice biometrics for secure mobile banking.
Written by Asha Barbaschow, Contributor

Australia and New Zealand Banking Group (ANZ) has released its results for the first half of the 2017 financial year, recording AU$2.9 billion in after tax profit, an increase of 6 percent year on year.

For the half year ended March 31, 2017, ANZ reported total revenue of AU$10.6 billion, with its Australian operations accounting for AU$4.7 billion of the sum.

During the half, ANZ chief executive officer Shayne Elliott said his bank has been focused on improving the customer experience, noting that 60 percent of customers in Australia and 64 percent in New Zealand are currently "digitally active".

From mid-2017, ANZ customers transferring more than AU$1,000 through the bank's mobile apps will be able to use their voice to automatically authorise high value payments, and bypass usual security measures such as visiting a branch in person.

The voice biometrics initiative will kick off with a pilot running with ANZ staff and select customers in May using the "Grow by ANZ" mobile app. The service will then be rolled out to ANZ goMoney and other digital services progressively.

ANZ touted voice biometrics as the next step in making banking more convenient for customers while also strengthening security, and partnered with natural language company Nuance to take the platform to market.

During the half, ANZ also launched BladePay, a mobile payments solution for Australian businesses, in partnership with South African-based payments startup ThumbzUp, and introduced card replacement for lost or stolen cards within 15 minutes via the bank's digital wallet.

In delivering ANZ's first quarter market update in February, Elliott said initiatives including Apple Pay and Android Pay drove ongoing net customer acquisition gains in the bank's Australian Retail Transaction Banking segment.

ANZ was the first bank in both Australia and New Zealand to launch Apple Pay, in April last year.

ANZ was the only member of Australia's big four to embrace Apple Pay, having left the group of banks requesting collective bargaining rights with Apple and demanding open access to iPhone's near-field communication (NFC) technology. ANZ is currently the only bank in New Zealand offering the service.

Elliott told shareholders on Tuesday that his bank is focused on expanding its customer-facing innovations, after again pointing to the success of Apple and Android Pay.

"In 2016 we refreshed ANZ's strategy to ensure we were on a path to rapidly adapt to the changing environment and deliver materially better outcomes for our customers, the community, and shareholders," he explained.

The bank's strategy involves a significant reshaping of its business, which includes changes to its operating model for technology, operations, and shared services in a bid to accelerate the delivery of its technology and digital roadmap, bring operations closer to its customers, and continue operational efficiency gains.

As a result, divisional operations from Technology, Services & Operations (TSO) and Group Centre have been realigned to divisions, the bank explained on Tuesday.

Also on Tuesday, ANZ announced it was moving to a Scaled Agile approach to organising and delivering work, aligning itself with the likes of Google and Spotify which use the approach within their respective organisations.

"We are moving quickly to meet customer expectations by delivering more of our services through digital channels, with digital sales in Australia up 24 percent," Elliott added.

"These results show we are creating a very different bank, one that is consistently producing better outcomes for customers and for shareholders. These are still early days and I am pleased with the significant momentum we have now established in the business.

"Our intention is now to accelerate our transformation through wider implementation of Scaled Agile throughout ANZ."

In its 2016 full-year results, ANZ posted AU$5.7 billion in statutory net profit, representing a 24 percent tumble year on year. At the time, the bank attributed the profit dive to, amongst other things, its focus on competing in the "digital age".

"The environment for banking remains constrained with intense competition and pressure on margins, subdued lending growth, rapidly changing customer expectations, and increasing regulation," Elliott added on Tuesday. "The outlook for the second half remains broadly neutral. We are responding decisively to these continuing pressures through a financial, digital, and cultural transformation of ANZ."

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