What you need to know

• ANZ Bank wants its customer relationships to be conversational not transactional.
• That’s mean moving beyond product silos that defined banks in the past and building technological and organisation capabilities to better gauge where the customer is in the life cycle of needs.
• It also means making sure that any decisions it nudges the customers towards prize lifetime value over short-term revenue.
• The bank already has experience with a decisioning model in its ANZ Classic traditional business (via Unica), but the strategic direction is to move towards the Pega model used by ANZ Plus (and by competitors Commbank and NAB).
• ANZ reports early wins: stronger customer retention and and a near doubling of application completion.

Personalisation pays, per ANZ Bank. Implementation of its personalisation strategy – and the underpinning decisioning infrastructure – is moving the needle with high single digit retention increases for customers coming off fixed loans despite cost of living pressures running red hot.

Meanwhile, the bank's equivalent of cart abandonment – stalled product applications – has almost halved, per head of personalisation and digital sales, Andrew Palmer. He told Mi3 that's because better integration means it can now more effectively utilise cross-channel marketing to message customers that have started applications, resulting in a near doubling of completion rates.

With online sales volumes for the bank now sitting at 75 per cent, Palmer says this both underlines the strength of digital adoption and also "allows us to engage with our customers in new personalised ways.”

Decisions, decisions

ANZ is also moving strategically to more contemporary decisioning model. It has made a long-term bet on Pega which is being used by ANZ Plus – the digital banking business that houses the ANZ app.

Two of its Big Four rivals — Commbank and NAB — have backed the same decisioning horse. Westpac considered the platform and even reportedly issued a decisioning RFP that had Pega painted all over it, according to industry observers, but ultimately backed away. Instead it's now understood to be focussing on wringing value from an Adobe investment.

ANZ Classic, the traditional banking business, already has experience and capability in decisioning, benefiting from earlier investments in Unica (Once IBM, now HCL) and Adobe. Per the bank, that work already provides a unified view of the customer.

But it’s now looking to the future.

Long view

Palmer heads a team of several hundred people with an extensive set of capabilities across marketing, analytics and technology. When he first moved into his current role a year ago many of those capabilities were dispersed in different parts of the bank.

"We brought that together so at any point in time, if we're having conversation with a customer, we know who's doing what, and how it works. There’s no point having fragmentation… you can’t get a single view of what's being discussed, so they all must come together," he told Mi3.

“We’ve got technology engineers, testers, API integrators, automation roles and data and analytics roles as well as marketers, content, strategy, and product owners.”

“We have orientated around customer; I've moved away from product verticals.”

Now the focus is on the full customer life cycle – whether that’s onboarding, better engagement or retention: "My team is structured around that, with a clear mandate to make sure customers are getting more from the bank."

Defining personalisation

What makes Palmer’s role a little different to other personalisation specialists is that he also heads digital sales, which now account for three quarters of the transaction volumes.

He thinks the dual responsibility is logical. "You can't decouple acquisition from personalisation,” said Palmer. "They go hand in glove.” Plus, he thinks better targeting drives increased value to customers – and therefore the bank too – over their life cycle.

Personalisation is a vexed issue. Vendors love it – it gives them something to sell. But the actual experience for brands has proven complicated in the past, with industry analysts Gartner suggesting many projects were or will be abandoned. What’s more they say marketers find personalisation hard to defend in budget meetings.

Part of the problem is that personalisation means different things to different people.

At ANZ its about making sure you provide the most relevant products to customers when those products are most appropriate to their needs. That’s a more sophisticated view than the short-term revenue driven upsell imperative that many software vendors have pushed over the last decade, and too many marketers bought uncritically.

Personalisation is also about customer experiences and ease of use, per Palmer.

“How do [we] make it delightfully easy. That is ‘know the customer’; is it targeted and relevant; how is it trusted? Those are the three things we drive.”

“The whole point of personalisation is that it's contextual to a customer in their lifecycle.”

The bank needs to help customers achieve their financial goals. It can't do that if it doesn't know what they need in their current stage of life. If it does, it can serve them contextually relevant information based on their financial needs in the channels that make most sense to them, he added.

Customer dynamics 

To do that ANZ relies on a customer dynamics model that reflects metrics such as the products per customer, product usage, user activity, and lifetime value.

“We prioritise our work to help enable those things. Overall, the modelling is based on the dynamics of customer engagement and usage," said Palmer.

He acknowledges there is a lot of work to be done – and the tech and its feeds are far from perfect.

“Like any bank, there's a way to go to get that decisioning working faster, and more accurately. There’s lots of work around which predictive models to use, what's working, what's not.”

Channels shifting

The core principle of personalisation is how do you provide value and relevance for the customer across the bank, said Palmer.

In banking especially, it’s a matter of understanding not only which channels are the most engaging, but which are the most secure and the most trusted.

“People are opting out of the email and SMS at a rate of knots, so how do you start to provide the right channel where you can have the conversation with the bank?”

“That around your app, your internet banking and really having a personal authenticated experience to know it [really] is ANZ. It’s trusted and qualified.”

“As we move away from transactional banking to conversational banking, how do you help someone support their needs such as saving for a home? How do you nudge them along the way, give them tips they need [and provide] a more contextually experience? If they are looking to buy a home, how do you bring a layer of services behind that?”

Any successful conversational banking model must be able to pull information threads together in real time across all platforms, including call centres.

“There is no point me having conversation about providing a product if you're having a challenging conversation about something else [in the bank].

“That's really the absolute focus for us,” Palmer said.