​ANZ says Apple Pay, Android Pay instrumental in Q1 customer acquisition

The bank said gains in new-to-bank customers for the first quarter of the financial year was driven by the success of Apple Pay and Android Pay.
Written by Asha Barbaschow, Contributor

Australia and New Zealand Banking Group (ANZ) has released its first quarter market update, reporting an 8 percent increase in statutory net profit to AU$1.6 billion.

For the three months ended December 31, 2016, ANZ said initiatives including Apple Pay and Android Pay drove ongoing net customer acquisition gains in its 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.

At the time of launching Apple Pay, ANZ chief executive officer Shayne Elliott revealed that the motivation behind launching ANZ Apple Pay was the pressure he received from customers.

"The reason we are here is I was sick of being hounded on Twitter and email by customers saying, 'When are you going to get Apple Pay?'," Elliott said.

"That was sort of a joke, but actually it's real, it's true, we're here today because customers want this. As a customer-focused bank who believes in innovation and the absolute digital way we've got to be, this just seemed like such a natural thing for us to be doing."

The bank said it was also the first to work with Android Pay.

Elliott told shareholders on Friday that his bank has the capacity to invest in the full slate of digital technology that it has long boasted a focus on.

"That's something that we can never have enough money to invest in digital. The reality is that it's about getting the right cost mix," Elliott said. "That's things like Apple Pay, things like the whole digital experience that we want to continue to improve."

For the first quarter of the 2017 financial year, the bank's cash profit came in at AU$2 billion, up 31 percent year on year.

Profit before provisions was up 17 percent and revenue also climbed 7 percent over the corresponding period a year prior.

Since the start of FY2017, ANZ has signed agreements to sell its 20 percent stake in Shanghai Rural Commercial Bank, the UDC Finance business in New Zealand, and ANZ's Retail and Wealth businesses in five Asian countries.

The transactions are expected to complete in the second half of FY 2017 and 1H 2018, subject to regulatory approvals.

"We're pretty pleased with the result. It's early days, it's the first quarter of the year and we're going through quite a transformation at ANZ ... we're really pleased with how the year has started," Elliott said.

"We've had a view that the world that we live in is just slowing a little bit and therefore, in that view we've got to be even more efficient if we want to win and be winning with our customers."

During the quarter, ANZ launched BladePay, a mobile payments solution for Australian businesses, in partnership with South African-based payments startup ThumbzUp.

ANZ also recently extended its contract with Singtel and its subsidiary Optus Business, which will see the telco giant provide telecommunications and managed services to the bank throughout Australia and Asia out to 2020.

At the time, Elliott said Singtel's services have "played an important role" in the bank's adoption of technology to simplify and enhance banking, as well as advocating staff collaboration.

Earlier this week, ANZ announced the appointment Lynwen Connick as its new chief information security officer, who in March will leave her role as first assistant secretary information sharing and intelligence at the Department of the Prime Minister and Cabinet to take up her new position.

Connick, who replaces former CISO Steve Glynn, will report to group executive technology Gerard Florian. Florian explained that Connick will be charged with ensuring the bank's information security strategy evolves with the changing technology landscape and supports the bank's digital transformation.

Connick is the second executive appointment ANZ made this month, with Emma Gray joining the bank's technology executive team in the newly created role of chief data officer.

Reporting to group executive of Digital Banking Maile Carnegie, who joined ANZ from heading up Google Australia in March last year, Gray will also play a crucial role in ANZ's digital transformation strategy.

ANZ's company reshuffle was announced in September, after its COO Alistair Currie announced his departure.

In its 2016 financial results, ANZ posted AU$5.7 billion in statutory net profit, representing a 24 percent tumble year-on-year.

The bank attributed the profit dive to, amongst other things, its current focus on competing in the "digital age".

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