Sreeram Iyer, COO Institutional Banking, ANZ Bank
With the proliferation of digital, customers are expecting banks to offer solutions on social media. The findings of 183 year old Australia and New Zealand Banking Group, commonly known as ANZ bank are unavoidable. “74% customers expect banks to communicate via social media, 54% customers expect banks to operate & communicate on Twitter anticipating a response within one hour is what reveals McKinsey survey”, says Sreeram Iyer, COO Institutional Banking, ANZ Bank. Though all the financial institutions in the world are embracing technology to accelerate operations and provide better customer service it’s difficult for traditional banks to accomplish the customer demands. “Ever since the existence of banks, they are not used to the idea of responding in one hour”, says Iyer. While dealing with rapid changes and rising customer demands it’s important for banks to adopt technology which meets customers’ expectations. “Strategic alignment comes first, whereas the choice of technology later”, adds Iyer. Many old banks believe that, while solving problems there should be a shift in the mindset from old ways to new ways.
Technology adoption at banks will be four times to what it was two years ago. ANZ Bank has implemented robotics and soon intends to adopt Machine Learning tools. ANZ bank believes that emerging technologies will impact jobs which are repetitive in nature. A recent LinkedIn survey revealed, the top 10 designations a decade ago don’t exist anymore. Employees don’t have a choice but to train and re-skill themselves.
Digital adoption is inevitable for the growth of the bank. Currently, banks in APAC region are facing a sharp decline in Return on Equity (ROE) due to margin compressions. “In the last 5 years decline in ROE is around 2%. The fall in ROE severely impacts banks profitability and valuations”, says Iyer. The McKinsey survey mentions that there is a possibility of improvement in margins and ROE by 9% till 2025. At the same time, ROE could topple down by 6% if banks fail to adopt digital technology.
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By Ishan Shah & Babu Nair
