Revitalised bank seeks simplicity

ROB O'NEILL
Last updated 05:00 07/07/2013
chapman
Nicole Gourley/Fairfax NZ

DELEGATOR: ASB chief executive Barbara Chapman.

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At ASB, there is a lot of talk about getting their mojo back.

As the bank completes its shift to high-profile new custom-built premises in Auckland's Wynyard Quarter, chief executive Barbara Chapman freely admits she is, in banking terms at least, standing on the shoulders of giants.

Chapman's ultimate boss, CBA's Kiwi chief executive Ian Narev, is the latest of a line of larger-than-life leaders Chapman has worked for. She makes no bones about the fact she has big shoes to fill, preceded as she was by the likes of Ralph Norris and Hugh Burrett in leading ASB.

"People understand the legacy of Hugh and Ralph," she said. "I want to be measured against the legacy I leave, but there's got to be a level of comparison. I've learnt a lot from both."

From Norris, Chapman learned the power of a simple single vision for an organisation. Norris took CBA on a quest to become number one in customer satisfaction - and arguably transformed the bank in the process.

Chapman admired Burrett's passion and ability to engage staff. From him she learned the importance of being able to connect with people across all levels of the organisation.

Given that legacy, Chapman said her role as chief executive is to help ASB rediscover the culture that made the bank so successful, to help the bank believe in itself after a period in which, she said, it had become more bureaucratic than it needed to be.

And there are plenty of opportunities and challenges.

The bank she leads, once called Auckland Savings Bank, still has space to grow in both market share and geographically within New Zealand. ASB is still stronger in Auckland, Northland and the West Coast than in some "non-traditional areas", Chapman said.

However, she said, ASB is now growing and gaining market share across all areas of its business.

While there has been some noticeable back slapping among the antipodean banking community over how well regional banks have performed through the global financial crisis, Chapman attributes that success to bank customers.

"Our performance is a reflection of our customers' performance," she said. "New Zealand has come through relatively well."

Chapman said businesses are feeling more confident. Because they have done relatively well, there is momentum building and that is reflected in improved bank balance sheets.

Indeed, a survey of bank financial statements reveals that almost across the board, New Zealand and Australian banks have been able to reduce their provisions for doubtful debts pretty much back to pre-crisis levels.

Chapman is singing from Norris's song sheet in saying that what really defines a bank is service. Customers want banking to be so simple, so easy and so transparent that banks are not a big feature in their lives.

There is a new challenge emerging, a transformation in the way customers want to do business with their banks. Technology, particularly mobile technology, is playing a huge part in that sea-change.

Already as many customers are logging on to ASB's website using mobile phones as desktops, and the mobile functionality was only launched just over a year ago, Chapman said.

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In contrast, only about 2 per cent of transactions now go through a branch.

Such disruptions are forcing big rethinks about how banks service customers and to make such service simpler and easier.

"There is a phenomenally rapid uptake of new technology."

And it isn't just mobile. Customers want to interact in multiple ways thorough multiple electronic and digital channels.

Those changes create legal and regulatory hurdles, Chapman said. A customer may want to "originate" a banking product through their mobile phone, but how does a bank do that? How do they identify the customer and meet compliance requirements?

For ASB's part, security on mobile applications is as good as on the desktop, she said.

Technology is also changing the competitive landscape in which all banks operate. From competing almost totally against other banks and financial service providers, banks are now rubbing up against the likes of technology giants Amazon, Paypal, Google and Facebook.

All of these in one way or another are looking to lubricate the financial wheels of their users. Chapman said such companies have significant capability and data.

"The sector is no longer the domain of financial services providers," she said.

That means bankers have to look at the world differently to find opportunities.

Such changes are being openly acknowledged in the design philosophy of ASB's new Wynyard Quarter headquarters.

Chapman said the building and fit-out has been designed to be mindful of the way people work within different teams and with different projects going on all the time and with different interactions at different times of the day.

That means the new building offers different kinds of workspaces - rooms, benches and workstations and relaxed environments to encourage more creative thinking.

And then there's the barbecue deck . . .

Chapman has only really worked for two employers, but has had a broad career within those two large organisations.

ASB's chief executive since April 2011, she spent 13 years at ANZ before shifting to ASB. She has held various positions in parent bank CBA in Australia and led the group's Sovereign Assurance business in New Zealand for two years.

While chief executives used to be almost exclusively sourced from among the ranks of current and past chief financial officers, Chapman's rise to the top at ASB marks a change in corporate sentiment where broader skills are now getting serious consideration.

Chapman has variously been a leader in human resources, marketing and retail banking.

While ASB is part of that much larger Australian CBA group, Chapman said the bank is master of its own destiny locally. CBA boss Narev holds managers of the group's different businesses responsible for what they deliver, she said. He shares his opinion, but always steps back from telling them what to do.

In banking, new challenges are always presenting themselves, and right now regulation is top-of mind. Chapman said the pace of such regulatory change is an issue.

"We are large organisations and there is a level of regulation needed. I'm happy with that but think the pace of it needs a look at," she said.

Some changes, such as the Reserve Bank's Open Bank Resolution policy have been worked on for years and are well thought through, Chapman said. Others, such as a new push to use macro prudential tools to control a possible housing bubble, have emerged quite suddenly.

"Do we feel like we've been heard enough in relation to unintended consequences?" she asked. "We've probably been listened to, but that policy is coming anyway."

Chapman said she thinks ultimately macro prudential tools will have an impact on the price of lending for customers.

She also points to a seeming inconsistency in the Government's position.

The Government, she said, is nervous about housing bubbles and costs, but the Government's own bank, the cheapest in the market, is helping driving that.

- Sunday Star Times

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