POLICY MEMO TO THE BOARD OF ANZ BANKING GROUP

Executive Summary 

As the 2^nd largest Australian bank and one of the most eminent banks in global level, Australia and New Zealand Banking Group (ANZ) confront the significant level of innovation challenges and developing plans for dealing with such challenges. The leaders in the bank require adopting significant policies in innovation and overall operational aspects, which is the key focus in this study. Innovation-based risk management in the data security practice in every department of the ANZ Bank is required as part of innovation efforts. This can be generated by creative leaders through their effective skill to achieve a market advantage in the ANZ Banking Group.

1.0 Introduction

This assignment presents a Policy-Memo to the Board of Australia and New Zealand Banking Group (ANZ) (in terms of assets, the second largest in Australia and third-largest by market capitalization), regarding key planning and challenges of innovation faced by the organization. The report also takes into account the scope of incorporating potential leadership strategies in its strategic planning for dealing with innovation-related issues. 

2.0 Case Study Overview

The Australia and New Zealand Banking Group is facing significant challenges in the overall areas of planning and innovation in its banking services and financial operations. The key problem for the ANZ banking group is due to rapid advances in the technology of performing the banking operations, specifically considering the ways the banks are operating in the global level and preparing for future (Barbaschow, 2017). Adoption of advanced technology-based digital banking model and shifting from the existing business model is another innovation associated issue faced by the leaders in the ANZ Banking group. Application of suitable leadership approach of strategies has been essential for the banking group for overcoming these innovation challenges in the organization. 

3.0 Analysis of Case Study 

3.1 Innovation challenges faced by the ANZ Bank 

As stated by Crozier, (2019) change of technological application and its adoption by the banking industry, specifically the means in which banks are adapting to these changes, presents a significant level of challenges for the banking industry. The banking industry in global level is facing challenges in case of launching and continuing the banking innovations like United Payment Interface and Electronic Fund Clearance Services due to lack of adequate supportive infrastructure of innovative technology for maintaining financial operations (Kane, 2018). Similarly, shifting to an innovative technology-based banking system and operations based on analysis and predictions on future trends of innovation in banking have been a significant challenge faced by the ANZ Banking Group.   

Eniola & Entebang, (2015) considers that for the ANZ, predicting the next step for adoption and applying the futuristic innovation perspectives in its business model has not been easier for the organization and they lack clear ideas regarding what the future of innovation in banking looks like. As many of the eminent banks like Commonwealth Bank, NAB and Bank of Queensland in national and global level have stepped forward towards changing their business models based on innovation perspectives, decision making on the same ground is a challenge for ANZ. Kane, (2018) argued that the ANZ no more finds application of Universal banking Model more attractive in the present scenario of technological innovation. Moreover, considering from innovation perspective, the cost of complexity in technology has been another major issue faced by the ANZ Banking Group, creating barriers in innovation efforts in its overall banking and financial operations. 

3.2 Key Planning regarding Innovation Challenges 

For dealing with the innovation challenges faced by ANZ, the banking group had adopted a certain level of planning. As described Peyton, (2018) taking an equity stake in the local start-up Data Republic is one of the most significant planning developed by the group, which is aimed at boosting innovation ambitions of its banking system through improving the data-sharing environment. This is the reason why ANZ had planned of developing a data-sharing control-centre for achieving the benefits of storing, categorising and sharing data and maintaining auditing framework and governance through applying innovation. Barbaschow, (2017) mentioned this specific planning as an integral part of operating in the modern digital economy for ANZ. However, it has been observed that ANZ has been focused on prototyping multiple new apps for its overall financial governance operations as part of its initiatives for embracing innovation well strategically. 

According to Parameswar, Dhir & Dhir, (2017) ANZ Banking Group ramped up its system of open banking preparations by generating 21 new ideas of apps, in which the group has applied Google Cloud-based technology across the institution. This three-day innovation effort was part of the planning of developing solutions to customer problems based on innovation aspects and opportunity in the banking industry. Therefore, considering the similar steps adopted by many of the globalised banking systems, ANZ Group made this open banking operations a significant part of its innovation related planning for the future. Apart from all these, other major aspects of its innovation efforts are its larger focus on agile principle in the organization, which, according to the planning of ANZ Banking Group, might be of crucial importance for dealing with innovation challenges of the group (Tornjanski et al., 2015).  

3.3 Potential Leadership Strategies 

In ANZ Banking Group Leadership skills come with a variety of behavioural practice that provides stability to its organizational practice in a regular manner. The strategy of Focusing and monitoring on every single activity of the department, as applied by the leaders in ANZ, helps them in taking a decision and develop innovative ideas to attract customers for the business growth. To generate innovative idea collection of information is emphasized by the leadership as a major task. In this context, Mariotto & Verdier, (2015) stated that to conduct an information-sharing relationship between the employee and management is required to be strong. On the other hand, Kamaludin & Purba, (2015) opined that to collect information significant role is played by the relationship development between the customers and the employee in ANZ Banking Group. Such an innovative strategy of making a good relationship with the customers is developed by the innovative leadership approach in ANZ. 

3.4 Impacts of the Leadership Strategies on ANZ Bank

Proper regulation of the attitude of the employee makes them deal with the situation with innovation to drag customer attention towards the organization. In ANZ Banking Group, between the autocratic and democratic leadership practice, the performance of the democratic leadership induces the skill development for strategy formulation and its implementation to perform different tasks. Fragouli & Xristofilaki, (2015) stated that application of creative leadership practice by the business leaders in ANZ is an attractive skill that provides an opportunity to apply something out of the box to deal a very common situation. However, the application of a new strategy by leaders with creative mindset makes the task attractive and this is a specific advantage of the leadership approach applied in ANZ Banking Group. Condition development for innovation generation in the ANZ always serves competitive advantages to the organization. The interest of a democratic leader towards the innovative practice in the organizational context helps to perform a collaborative performance with the teammates. 

To develop innovation some behaviour is observed in the leadership approach in ANZ, which reflects acceptance for a different culture, change management ability, creativity, motivational skill, listening and communication ability, risk raking and communication skill. In this context Peyton, (2018) stated that such kind of creative leaders remain ready to learn every time and adaptation ability along with the flexible nature induces the innovative development in the organization. In ANZ Banking Group, for three different dimensions, the creative leadership practice is performed such as integration of the diverse creative contribution, facilitating creativity and direction towards a creative vision.  

4.0 Conclusion

4.1 Innovation challenges faced by the ANZ Bank

The innovation challenges faced by the ANZ Banking Group currently have impacted on overall business decision making by the leaders of the bank as they find this difficult to reach a definite strategy or planning regarding the orientation of banking operations towards innovation. Most importantly, these challenges are creating issues for identifying an innovation-oriented business model for the bank for shifting its operations to innovative working objectives and operational modes. In addition, the challenges are leading to resistance for introducing innovative banking tools for enhancing the standard of customer service.  

4.2 Key Planning regarding Innovation Challenges

The plan of introducing equity stake in the local start-up data republic might help the bank in stepping forward in terms of introducing innovative systems in its overall system of data governance and financial auditing framework. Moreover, this planning might be effective in sharing data with the trusted parties and thereby developing an innovative approach in digital-economy based operations in the market. On the other hand, the plan of prototyping 21 new apps would influence customer service standard of ANZ based on open-banking innovation and enhanced potential for privacy considerations. Further, planning of applying Agile-oriented innovation might help in accelerating the process wit help of Lean methodology.  

4.3 Potential Leadership Strategies

To develop innovation some behavior is observed in the leadership approach in ANZ, which reflects acceptance for a different culture, change management ability, creativity, motivational skill, listening and communication ability, risk raking and communication skill. Such kind of creative leaders remain ready to learn every time and adaptation ability along with the flexible nature induces the innovative development in the organization. In ANZ Banking Group, for three different dimensions the creative leadership practice is performed such as integration of the diverse creative contribution, facilitating creativity and direction towards a creative vision.

4.4 Impacts of the Leadership Strategies on ANZ Bank

Consideration of the followers and acceptance towards the primary creator of a leader enhances the skill development in the organization. Discussion session with different ideas to make a project successful by meeting between the democratic leader and the followers generate a scope of innovation in a particular organizational practice, which creates specialized scope for further enhancement of the leadership in ANZ

5.0 Recommendations

In spite of the innovation challenges faced by ANZ, the plans of the equity stake in the local start-up data republic and prototyping 21 new apps have been effective in dealing with those challenges. However, the ANZ Banking Group needs strengthening the overall financial infrastructure of the operations considering likeliness of the threat from the ever-growing cost of innovation technology and IT infrastructure supports. Apart from these technical-based development orientations of operations, ANZ should specifically focus on higher consumer-value based trustworthy ecosystem development for its financial operations, accompanied by wise policy development for applying Agile-based innovation approach. Hence, there is the necessity of taking into account a holistic perspective of innovation, instead of providing a larger focus on advanced-technology based data governance and apps-based open banking operations.  

To maintain creativity in the workplace maintenance of the workplace environment is the responsibility of the leader. The leaders in ANZ Banking Group would also monitor the value present in the environment and try to utilise those for innovation development. Different innovative skills of the employees which are not considered for the professional requirement are to be exploited by the leaders to make a very attractive environment in the market as well. It has been observed several times that autocratic leaders also can be creative by sharing the innovative process to the employees and the employees get it done through implementation.  Hence, the leadership in ANZ might avoid top much dependency on one another that could makes the creativity or innovation delayed. On the other hand leadership in the bank should focus on reducing lack of communication and information sharing failing which, the leaders would not be able in developing effective relationship-based approach of introducing innovative efforts for customer service.

The leaders in ANZ Banking Group would focus on developing and maintaining approach of combined working of managers and employees as an effective part of innovation generation. Therefore, its proper application in the organization should be ensured by the leadership in ANZ. The leaders would concentrate on balancing the performance of idea development and implementation for allowing the integration between the creative and supportive contribution together. It will help them in increasing interest of the people for contributing to their effort towards the project work. Synthesis of the innovation, in not only the personal ability but also in identification or development of creative nature among the followers, will be the responsibility of the leadership in ANZ to be a successful manager.