Deloitte: addressing change in the banking sector
In early December 2019, Deloitte was engaged to write a report on ANZ Bank New Zealand in order to assess the bank’s attestation and assurance framework.
This decision came subsequent to the departure of CEO David Hisco, following criticism of his leadership and led to intense scrutiny. Deloitte’s verdict was that fundamental changes would need to be enacted in order for ANZ NZ to “reach the level of maturity that was expected of [it]”. The findings of the investigation should be enlightening reading for any bank experiencing similar problems, or looking for best-practice approaches to business transformation.
Progress: Deloitte found that ANZ NZ’s “improvements made to date are modest relative to the bank’s planned initiatives”.
Despite this, the report decided that the bank certainly had “positive intent”, which it found both appropriate and valuable. Setting clear and positive goals for a bank are vital to ensuring that its growth is measurably maintained.
However, it should be emphasised that goals must be realistic and quantifiable with hard data to ensure intentions meet results.
Governance: Good leadership depends on accountability, providing structure to the company, and responsibility for making high-level decisions. Well-conceived processes should be firmly in place, yet the report found ANZ NZ’s board was too dependent on the “high quality of individuals within the bank when processes, governance and controls are inconsistent”.
Whilst confidence in talented employees is certainly a positive thing, a board should not solely rely on their capabilities, as this creates issues of liability.
Culture: Because ANZ NZ has taken a ‘systematic approach’ to organisational culture, Deloitte found “no evidence the bank has a culture of supporting non-compliance or deception”.
However, it did note a certain “level of complacency” regarding the identification of failures or procedural shortcomings. Being proactive in addressing issues as soon as they arise is vital to quarantining the issue early and eliminating the problem. Doing so could, in the report’s view, provide a motivation for improving “the accuracy of data and the effectiveness of controls”.
Framework: It is vital to recognise the interconnectedness of a bank’s goals; they are inextricably linked and the success of the whole depends on maintenance of its components. To approach them as separate entities is to invite the potential for oversights and mistakes of judgement.
Deloitte was clear in stating that this was an issue not solely with ANZ NZ, but rather “reflects the evolution of directors’ attestation frameworks more generally across the sector”. This revelation should galvanise the banking sector into action: everyone can be doing a little more to ensure they are running a solid, accountable, and dependable organisation.
For more information on business topics in ANZ, please take a look at the latest edition of Business Chief ANZ.
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