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Terrifying Pace of Change of Technology has caught many napping.

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“TERRIFYING” — that was the word used by ANZ Bank chief executive Mike Smith to describe to his board and senior management the tsunami of disruptive technology about to hit the banking industry.

Mr Smith had just hosted ANZ’s directors and executive leaders on a week-long study tour of Silicon Valley in California, which is known as the cradle of innovation.

Among the companies visited were technology heavyweights Google and Apple, as well as start-ups and entrepreneurial ventures targeting various parts of the banking industry’s value chain.

The insight into Mr Smith’s thinking was provided yesterday by ANZ chief information officer Anne Weatherston, who gave the keynote address yesterday at the FST Media technology and innovation conference in Melbourne.

Responding to a question about the study tour, which she also attended, Ms Weatherston said: “The immediate reaction was, to quote Mike Smith, terrifying.

“Terrifying because what the board witnessed was the pace of change that’s happening in Silicon Valley; indeed in the US.

“Much of it is being driven by small companies that are very active in payments but very well funded, and they are moving very quickly.”

In her address, Ms Weatherston said the world was living through a period of revolutionary change that would transform the way people worked and interacted, all because of information technology.

Technology, she said, was empowering customers and breaking down the financial services industry’s supply chain.

Before customers stayed local but now they had the ability to go global, accessing new services, creating markets and businesses and communicating widely.

The supply chain, meanwhile, was having links removed, with new entrants leveraging technology to provide services that were traditionally the domain of banks.

Ms Weatherston said that, for banks to be successful in the future, they had to provide superior service and compelling insights into customer needs.

“Banks will need to operate much more like (online retailer) Amazon,” she said.

“This path is new for banks but not for other industries.”

The car industry was an example of the kind of transformation required.

Ms Weatherston said it was no longer enough for car makers to operate with low costs and speed-to-market; what was needed was the provision of cars that were the best value and met customer aspirations.

The need to operate well in a digital environment was underlined in a recent survey that showed a strong correlation between digital maturity and profitability.

Companies falling into the “digerati” category, she said, were 26 per cent more profitable and 9 per cent more efficient as a result of their effective use of technology.

Ms Weatherston warned that the transformation would not be easy.

“Banking and bankers are, by training, risk-averse and change-resistant,” she said.

One thought on “Terrifying Pace of Change of Technology has caught many napping.

 Jeff Mazzini
Manjit June 21, 2013, 12:09 pm


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