How the crisis will change consumers forever

Much has changed irrevocably in the world since the crisis hit, but perhaps no more than consumer expectations. For many people, buying and selling will never be the same.

Businesses need to adapt to this new digital reality, and fast. What does the post-pandemic marketplace look like? And how can companies position themselves to win?

To discuss these themes and more, ANZ Chief Executive Officer Shayne Elliott sat down with Group Executive, Institutional Mark Whelan. Below is an edited version of that conversation.

MW: Rapidly shifting consumer preferences throughout the crisis are have forced many businesses, including ANZ, to rethink what they offer and how we offer it to customers. Can you talk about that briefly?

SE:  For many people going out and doing things, like they used to, was essentially made illegal for periods of time. People had to adapt.

So either out of need, or out of preference, we’re seeing massive shifts in consumer behaviour. I mean massive.

Cash usage has collapsed. We’ve seen ATM usage fall by 40 per cent. People are choosing not to use cash and a lot of stores are not accepting it. A lot of people are shopping online.

At ANZ, we’ve seen a massive reduction in traffic in our branches even though, as an essential service, by and large we’ve kept our branch networks open.

We’ve seen a significant shift to online. You would imagine, like all these things, people don’t like to change their habits but when they’re forced to and they do, some of those new habits will stay forever.

I imagine there will be a little bit of a return to cash. There will be a return back to branches. There will be a return to physical retail. But some of these changes are going to be with us forever.

Our Institutional and Corporate customers are people too, so if they can do all these things digitally and with great service as an individual, they expect to be able to do the same thing as the Treasurer or CEO of a company.

Those changes I think are going to be reasonably profound. There have been a lot of people out there making the comment that we've had five years of digital adoption happen in three months and I think that's absolutely true.

In the financial industry you're going to see a significant shift in service levels that will stay in place for some period of time.

By the way, it's not that these are necessarily new trends. They're just accelerations of old ones. There already was a move to digital and to paying for things with your phone and internet banking and all that other stuff; this has just accelerated it.

You’re going to see a lot more innovation in the system to deal with these new preferences people have, that will stay for long periods of time.

MW:  With the digital transition comes a lot of data. I know you've just recently made some important appointments to your Executive Committee around data. What does that signal for the future of ANZ?

SE:  There's been a lot written about how data is the new oil, and to some extent, we agree with that.

At ANZ we’ve been in business for 200 years essentially collecting, protecting and moving people's money for them. First it was bits of paper and then it was digital and all sorts of other things, but that's essentially what we do.

We collect it for people, secure it and move it when we are asked. Pay bills; change it into a different currency, that's what we do. It's pretty simple, yes?

What we're saying is actually, we now see a parallel opportunity to do exactly the same stuff with people's data. We are going to collect people's data, secure it and send it to where they want.

We are in the business of protecting data. One of the interesting things that comes through in research is when it comes to things like my money and protecting data, if you ask people who do you trust the most, it is often banks. More than IT companies, much more than others. They trust us at that core basic value proposition.

It's a massive responsibility for us, but it's also a whole new business model. At ANZ I think we are at the very, very early days of unlocking the value of that data and we now have three executives who are essentially in high-tech, as you said.

What we've got to do at ANZ is show we can actually use this data to improve our services, and be more intuitive, predictive and helpful as a result.

We've set up a whole bunch of protocols and principles about how we treat people's data. First of all by law but also just in terms of our own culture, we've made it really clear we have an implicit but in many cases also explicit contract of understanding with our customers.

Do you authorise me to collect this data? Do you authorise me to use it for certain purpose? I think we're well covered there. Actually what most people say is, ‘look I'm actually fine for you to use my data, particularly in an anonymised basis, if there's something in it for me’.

In a world of Facebook and Instagram and all these other things there is a different attitude, particularly among younger people, about data and privacy.

I think we can get that balance right. The greatest value we've got from the data is it's completely anonymised. It's not about what a single person did. It's about, those who live in a certain postcode, where do they shop? Where do they spend their money? Those are the sorts of things you really get insights about.

If I'm in the business of helping people buy and own a home, and I can see you saving for a home, it allows me to put in front of you things that might be of interest to you - furnishing that new home, buying a new TV to put in that home, whatever it might be; insuring the home; those sorts of things that can be done through using data intelligently and transparently.

I don't really know that any of us can predict how it's all going to work out. What we try to do at ANZ is make sure it's built on really strong foundations about customer privacy, permissions and security.

Shane White is content manager at ANZ Institutional