Interview with Anthony Healy | CEO BNZ

PwC: So do you think there are more threats today than there were say three years ago?

Anthony: I think so, yes. Regulation is seeing a significant level of change and that's going to continue. Digital disruption is accelerating and that's going to drive more change.

I also think the challenges in my business around funding and capital are getting more and more acute. That's going to have knock-on effects, and we'll see continue volatility in the system both economically and politically. European banks are still significantly undercapitalised, and if they were to fail that would have a massive impact like Lehman Brothers collapsing, and that would have a systemic impact around the world. Therefore I think the level of volatility is really elevated, and it's going to continue.

PwC: Thinking about technology and its impact on businesses, how is it changing competition?

Anthony: So I mentioned there were two big changes, and the second one is the enormous change we've seen through the digital revolution. It's completely changed the way we will be doing business with our customers today and in the future.

I think the digital revolution is enabling us to transform the customer experience. To make it more intuitive, simpler, more personal, you can do mass personalisation very easily. You can use data and insights to deliver much more immediate and real time benefits for customers based on their behaviour across every channel. It's increasing reach dramatically, so you can reach a much bigger audience domestically or globally – that has opportunities for us but also threats because our competitors don't have to be domestic.

I can reach into your domestic markets from anywhere – it's dramatically lowering costs, that's going to be a huge challenge for incumbents like us who have legacy assets to work out how you get down the cost curve. It's actually going to dramatically improve mobility for both our customers and our people. Our bankers or our staff will be incredibly mobile. They won't need to be anchored to a desk or a building or a PC but they can be very mobile – our customers are already very mobile. We can all do almost all our banking online or wherever we are around the world, so mobility is a massive change.

PwC: Speaking of mobility, what impact are you seeing around how we work and how we communicate?

Anthony: So the nature of everyone's roles will change: some roles won't exist so you will have to reskill or you'll be in a role that becomes more and more value add. The skills that will become really crucial are digital skills, people who are really adaptable and agile. You don't get trained in one thing and keep doing that for the rest of your life, you've got to keep adapting.

Tertiary institutions are going to become more challenged to what skills they actually equip people with and the tradition curriculum they teach today is going to become irrelevant in the future. People who can very quickly assimilate data from all of this new capability we've got and use that data for insight and decision making and value is going to be really critical. I don't know how you box that into a university course but maybe you don't. You won't need to go to university to learn software in 10 years because you would have learnt it online.

In terms of talent and jobs, some roles that people have today will cease to exist and some will change a lot. So for people inside our company, and I suppose it's the same across the economy, this will mean moving to different skilled jobs – some will be higher skilled some will be similar skilled.

That means the roles our people occupy will be more value add to our customers because they won't be doing the repeatable tasks, the automated tasks, they will be having a conversation with you about providing advice on wealth or advice on how to run your business or on how to grow your business or on what markets to enter or how can we optimise what we can do with you today and help you do things better.

PwC: So has your business encountered any problems off the back of that technology? I'm thinking specifically cyber security, privacy, breaches of any description? And what are you doing to build trust in that space?

Anthony: Like all the banks, we get many attempts at attacks a week. We have to keep investing in the resilience of our systems and our firewalls. The level of collaboration now between the banks at the moment is increasing dramatically because the government sees it as a systemic risk and the financial system could be disabled by cyber attacks, which is not just bad luck to banks but actually shuts down the financial system and payment system which is really bad for an economy.

We also do a lot of education for our people. Certainly, with anyone who has access to bank systems there is quite a lot of training they have to do to understand why it's important and how to follow standard processes to ensure they do the proper identification and if there is anything suspicious they refer that. Sometimes attacks are so random just to see if they can elicit any information. My CFO Adrienne often gets these emails from me saying to transfer money and we forward them all to our cyber security people.

Another important issue is privacy of data – and I think that becomes a reputational risk for big organisations. We've reengineered all of our fulfilment along end-to-end customer journeys so we have a very clear line of sight on how we fulfil a customer's needs and the process through which we do that. That has a benefit around privacy of data because you've got a much more controlled way of fulfilling customer needs.

PwC: And how do you think companies are balancing the need to be more socially responsible and the need to also keep costs in check and turn a profit?

Anthony: I think you've got to find the sweet spot where they intersect. You could spend all of your discretionary expenditure on good things that are not necessarily for profit but benefit communities. But that's not efficient either, so that's the tension: you have to find the sweet spots where you can deliver real benefit to communities which is aligned with your core capabilities that will generate reputational benefit for you as well.

Community finance is a good example, where we as a bank have that core capability, we have the right partners and that's reputationally a very strong agenda for us, and our people love it as well. If it's working for your people, it's working for your customers and communities and you've already got the core capabilities, then you're just leveraging those capabilities to provide a community benefit. But it's not cynical. You're always identifying what are the real community needs that you should be thinking about, and then you try and work out how you can bring to bear your capability to that in a way that doesn't break the bank financially, but you can generate real benefit for the community.

It's the same with issues of climate change and sustainability – we do a lot in that space, as we should as a bank. But we also work closely with a lot of clients on those issues, particularly farmers. And that's because we already have relationships with them and are trying to support them financially to be successful, but also invest in sustainability. I feel the question “how do you find the right balance?” is sort of not the right question, because I never know whether we will get the right balance or not. You're just always managing the balance and tension to make sure you land the right outcomes that benefit customers, benefit society or the community, and also provide a good reputational platform for you.