Interview with Alan Huse, ANZ
InstaPay Editor, Lauren Jones interviews Alan Huse, Head of Payments and Cash Management Product at ANZ
1) ANZ CEO, Shayne Elliott said during the Sibos keynote that the New Payments Platform in Australia was a ‘good first step’ for the industry but the time has come to concentrate on ‘what doors will open’ from the new platform. What do you think will be on the other side of those doors?
He also said people suggested it was innovative yet made the point that it was not particularly innovative as many other markets around the world have gone down this route and Australia was to some extent catching up. But it is something new, it’s the first major change to the clearing systems for some 20 years. It is really only since July that I would say we have seen all market participants start to offer it to their customers, so we are still testing on take-up. I think people are excited by the ability to make payments 24/7, with more information, however where I think the greatest traction will come is what is being called ‘overlay services’ the first two which are being are being talked about at an industry level are ’Request to Pay’ and ‘Payment with Attachment’. For small businesses and corporates, these present an opportunity to improve their own customer experience. Another part that is really exciting is being able to connect faster payments systems around the world and provide a much quicker and more transparent cross-border payments process; which is arguably a bigger pain point than in domestic payments. So in summary, for a business it presents an opportunity to improve their own payments experiences and customer propositions and for banks it presents an opportunity to not only deliver new products and services but also review the way in which we deliver them…. so lots to look forward to.
2) Australia is a large country, with quite rural and remote areas, and NPP is also an optional system for some banks. How will the benefits of the new payments system trickle out to those people?
It’s a good question and quite a topical one about the services provided to remote areas, who will increasingly rely on technology and digital channels to receive and make services. I think it’s an opportunity through those channels, such as mobile, to provide an effective level of service to those communities. Using mobile channels, some of the afore-mentioned overlay services, such as adding an invoice as an attachment will actually be of great benefit, perhaps at a cost and convenience that isn’t available to them today.
3) ANZ announced last year its ambition to push Agile approaches beyond its technology teams as part of its embrace of what the bank calls “new ways of working”. How is this being rolled out in the payments and cash management areas?
You are quite right, the bank has rolled out New Ways of Working, and it has been quite transformative. It has been done at this stage in the product and technology functions within Australia Division, not yet more broadly in the Institutional part of the bank, however we are exposed to that through the delivery of services that we get from these functions. As a Bank, we have embraced Agile and absolutely see the benefit. Compared to the days when you had long business cases that had to be written several times and work their way through the process, and by the time it was signed off, potentially the idea was out of date… we are now getting products out to market much faster and using the concept of test and learn. For example, the updates to our wholesale channel, Transactive Global, has been delivered in that manner and it has been a material change in the speed to market (and customer experience – customers were actively engaged throughout the design process). In addition to some of the more formal structural changes, Agile also simply encourages people to disband with traditional hierarchical thinking and simply pull a team together of the relevant people to get the job done.
4) Open Banking is also coming to Australia, how is ANZ preparing for this?
It is a legislated change, so we are obviously getting ready to meet the regulation which is in itself still evolving. We have a target date of July 2019 but I suspect there will be a series of steps to deliver over the next period. Initially, the legislation is focused largely on the retail and small business customer sectors, which gives us an opportunity in the corporate space to see how we will respond. As with most legislative changes, there is a compliance part and a products and services part and we have the opportunity to look at other markets and see what experiences they have had. We certainly look at the UK as one test case and have some ideas around the solutions you can deliver through ‘data-out’. We know our clients are really interested in what we can deliver that helps them run their businesses better and gives them better insight so Open Banking would appear to present some opportunities in this space.
The other interesting point to note is the implementation of Open Banking in Australia is not long after the launch of NPP. There feels to me a bit of convergence at some point of those two frameworks, together with how we want to embrace APIs as a delivery and connection mechanism. It feels like those three will lead us to a point that I can’t yet predict but we will likely offer solutions that don’t yet exist today and will be operating in a different legislative environment.
5) The way in which Open Banking is being thought of in Australia is quite unique as banking will be the first sector to implement it, but other industries such as utilities and telecommunications are also on the hook. This has the opportunity to be exceptionally powerful. How do you think these industries can come together to get the most out of Open Data?
It is a great point. The government in launching this is very much focused on presenting it as the ‘Consumer Data Right’ and the consumer’s ownership of their data and how they want to use it. The telecommunications and utilities industries have indeed also been targeted. These are also industries that probably get the same sort of scrutiny that the banking industry gets in terms of delivering a customer proposition. Interestingly these are sectors that will potentially benefit most from NPP as they are large B2C propositions where you are dealing with lots of customers, several competitors, old and new, and lots of data. I think there again feels like a convergence between the payments solution, the data solution and the efficiency and delivery of that.
Whether we can get all parties round a table I am not sure. Whilst the legislation at the moment is quite high level, I suspect as we drill down it will be complex to design the rules and procedures just for banking.
6) ANZ was part of the cross border SWIFT gpi pilot across Asia Pacific, what are the next steps for cross border instant payments in the region?
There is great excitement around what has been achieved from the pilot. The SWIFT gpi framework itself was already radically improving the cross border payments process through transparency, visibility and speed, something that has been a material pain point for us all. Commercialising it will be more challenging than a pilot, there are more complex rules like sanctions screening but what I have sensed is a real interest from the industry to do that. Whether we do that via corridors, via SWIFT as an industry utility or not I am not sure but there is a real determination to leverage what has been achieved already. Cross border payments has always been on the list as a potential overlay to NPP and has now definitely popped up the list because it is a genuine pain point but we have already managed to prove a case. So it is one of the key things we will be exploring further in the next year.
Alan Huse, Head of Payments and Cash Management Product at ANZ