In what can only be described as a challenging time for the region’s banks, corporate treasurers are looking for banking partners that are committed to them and the region for the long term. In this interview, Mark Evans, Managing Director, Transaction Banking at ANZ, outlines how the bank intends to continue to forge deep and lasting relationships with its corporate and financial institution clients and leverage its unique strengths to ensure treasurers are able to tackle the challenges of today and tomorrow.
Managing Director, Transaction Banking
Mark Evans is the Managing Director, Transaction Banking, at ANZ. He is responsible for end-to-end transaction banking services – including payments, cash management, trade finance and supply chain finance solutions – across ANZ’s home markets of Australia and New Zealand and the bank’s footprint globally.
Mark joined ANZ in July 2009 as the Global Head of Trade and Supply Chain, responsible for managing and growing the Group’s international trade finance related activities. Prior to his current appointment in June 2016, Mark was ANZ’s Chief Compliance Officer from 2013, developing and implementing a global compliance framework and ensuring high compliance standards in all the jurisdictions in which ANZ operates. Before ANZ, Mark spent five years at HSBC, initially as Head of Trade and Supply Chain for Australia and New Zealand based in Sydney and then three years in Hong Kong where he was responsible for the Trade and Supply Chain business across Asia Pacific.
What makes transaction banking and ANZ’s business in Asia Pacific a vital part of the bank’s ongoing strategy?
Asia Pacific remains a critical part of our strategy because that’s where our customers want to do business. The region is vital to the future of our customers in our home markets: Australia and New Zealand export about US$165bn to Asia and import about US$125bn from Asia every year. And by 2050 Asia will account for 50% of global GDP so it goes without saying the region is vital to our future plans.
Our presence in Asia Pacific remains a differentiator for us, especially compared to the other Australasian banks. And when compared to Asian banks, we have an unrivalled connection back to our home markets of Australia and New Zealand.
Within transaction banking specifically, we have seen major changes in the competitive landscape in recent years, with banks adapting and refining their strategies. Indeed, all banks have had to seriously consider whether they are committed to this business, especially as regulatory and compliance costs have increased.
We have decided that Transaction Banking, which sits within the Institutional division at ANZ, is a business that we are committed to and an area of the bank that is key going forward. The recent consolidation in some areas of the bank, such as the sale of our retail and wealth business in Singapore, Hong Kong, China, Taiwan and Indonesia to DBS, has initially no impact on our Institutional and Transaction Banking customers. We are very much open for business and committed to transaction banking in the region.
In what areas, in particular, does the bank have strength and what differentiates ANZ from its competitors?
Like all banks in this capital-constrained environment, we had to make tough decisions and be clear on where our strengths are. We have gone through a period of adjustment and are confident in our strengths and where we can best serve our customers.
Ultimately, transaction banking remains a relationship business and it is underpinned by trust. In fact, the whole financial system is effectively built on trust. We build our relationships and gain trust by being responsive to our customers, and having the knowledge and expertise to advise them appropriately. Trust and relationship are most critically tested during a crisis. Through the recent financial uncertainties and market turmoils we have demonstrated to our customers that we can be relied on when it really matters and can respond swiftly and effectively.
Focusing on forging trusted relationships has proved successful and in 2015 we maintained our top four Corporate Bank in Asia ranking in the Greenwich Associates Asian Large Corporate Banking Study, a rank we have held for the last four years. We also ranked first for relationship quality and achieved the top spot for overall service for the first time. Our relationship manager quality outperformed our rivals, and I believe we did this because we focus on the solutions rather than simply selling products to our customers.
Also, as previously mentioned, our geographical network – connecting Australia and New Zealand to Asia and the Pacific – is a major differentiator. We have experts on the ground in 15 Asian markets who can provide invaluable insights. We are well versed in the complexities of the markets and can advise customers how best to structure transactions to mitigate risk and ensure a successful outcome for all parties.
For instance, in the Mekong, if you are operating in countries like Cambodia, Laos, Myanmar, Thailand or Vietnam, it can be difficult to navigate the local nuances and regulations. And when it comes to avoiding exposure to financial crime, such as money laundering or terrorist financing, you need to have a banking partner you can rely on that operates to international standards.
In addition, we are especially strong and able to provide leading industry insights in sectors such as natural resources, agricultural business, infrastructure, financial institutions, and, in our home markets, property.
What plans do you have to build on these strengths and offer further value to your clients?
In terms of our product capability, we have always been known as a strong trade bank – trade is in our DNA. In recent years we have been steadily building our cash capabilities so we can now be known as a strong bank both for Trade and Cash. That is why we are investing so that customers can access the bank at a single point and seamlessly pick and choose the solutions they need regardless of what product set they fall into.
This is part of our significant investment in our digital capabilities. This will result in an improved customer experience, a consistent look and feel no matter what products or services our customers use or where in the world they choose to transact.
How does digitisation fit into the bank’s strategy and what areas, in particular, does ANZ believe that innovative technology can benefit its clients?
Digital is a core part of the bank’s overall strategy and the initiative is coming from the top, from our CEO Shayne Elliott, who outlined it as a key pillar when he began his new role in early 2016. Maile Carnegie, Group Executive – Digital Banking, joined ANZ in July 2016 from Google and has been challenging how we think about digitisation. The digital agenda is at the heart of our transformation and something every corner of the bank is working on.
In terms of trials that we can talk about publicly, we had a successful proof of concept using distributed ledger technology in cross-border payments. Although it is early days, we believe this kind of technology will play an important role in improving efficiency, transparency and security for our customers. Trade finance is another area where we are exploring the use of various new technologies to achieve better outcomes for industry participants.
Last November, we opened an innovation lab in Singapore called ANZ BlueSpace. The facility is dedicated to innovation for institutional clients, and it has been set up as a place for us to collaborate with partners – including participants from industry, academia and government – who are also part of the fintech ecosystem.
Is collaboration the way forward when it comes to developing solutions and new ways of doing things that can benefit the industry as a whole?
I think it is important to acknowledge that no one can do everything alone, and no organisation can innovate in a vacuum. This was demonstrated when we held the ANZ-NUS Financial Services Innovation Challenge in September. The event challenged students from the National University of Singapore to apply technologies such as blockchain, data analytics and APIs to solve the inefficiencies in trade finance.
IBM, Thomson Reuters and GitHub were supporting partners of the event, with EY, UN Women and DXMarkets providing mentoring and coaching to the students.
“We have always been known as a strong trade bank – trade is in our DNA. And in recent years we have been steadily building our cash capabilities so we can now be known as a strong trade bank and a strong cash bank.”
We, along with our partners, were able to educate the students about the real-world problems of trade finance, and IBM, for example, introduced them to the tools available in their apps and services platform Bluemix. This event demonstrated collaboration in action and was a vibrant meeting place for the various partners to put their minds together. The solutions the students came up with were impressive, and the quality of their work was outstanding. Many honed in on ways to use blockchain to reduce fraud in trade finance, something that we are also looking at. We believe it is important to include students in our thinking – they, after all, are our future. We are currently exploring with the students how we can develop the solutions they came up with.
With the distributed ledger proof of concept I mentioned, we saw some very tangible results in how the technology can be used for cross-border payments to address the inefficiencies in the correspondent banking system.
Looking to the next 12 months and beyond, what do you believe will be the mega-trends that shape the region and what impact might these have on treasury professionals here in the region?
I would anticipate that political instability will be a major issue in the next 12 months. We’ve seen some unexpected outcomes in recent months like Brexit, the election of Donald Trump, and the impeachment of President Park Geun-hye in South Korea. What we have learned is that predictions can easily be proved incorrect and that we should come to expect uncertainty. These kinds of events will likely continue in 2017, which could impact treasurers in terms of the value of the US dollar and the need to hedge their strategies effectively.
I expect there will be a continuing focus on compliance, particularly in the context of financial crime, capital and liquidity so banks and customers need to be aware and work together on embedding compliance into their business as usual.
Also, emerging technologies will continue to be a trend. Banks and corporates will need to be alert and agile so they can maximise the opportunities of the latest technologies while also managing increasing cyber-security risks.
You have mentioned cyber security and the risk of fraud. This is something our readers show a lot of interest in. How does ANZ help its clients to mitigate such risks?
Cyber criminals are becoming more sophisticated and cyber security is something our customers are increasingly asking us about. Previously cybercrime used to be a discussion for the largest corporates, and for chief technology officers or chief information and security officers, but in this digital age it is everybody’s problem. In an organisation, it is everybody’s responsibility to prevent it. Humans are the weak link – usually a cyber-attack happens because someone somewhere in the organisation did something they shouldn’t have.
Awareness is the first step in mitigating these risks. We embarked on a client education program, and have hosted a number of events for our customers where they heard from experts in the field and were in an environment where they felt comfortable asking any questions.
The issue of cybercrime can be overwhelming for corporates. Although mitigating the risks effectively requires significant investment, there are still some simple steps corporates can take to improve their people, systems, and processes. Internally, corporates first need to understand their exposures, educate themselves about the risks of cybercrime, and have a response process in place. Externally, they can leverage experts, look to best practices, and share and seek intelligence.
We are all stronger if we – our customers, financial institutions and other stakeholders – fight cybercrime together. It is a rising threat, but it is also a natural consequence of all organisations adopting new technologies. Cyber-security goes hand in hand with becoming a digital organisation, and we have been proud to share our knowledge on the topic with our clients.
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