Dynamic Business: Staying relevant in a world of change

ASB chief executive Barbara Chapman. Photo / Richard Robinson

ASB's Barbara Chapman is keeping an watchful eye on how the banking sector is being disrupted.

I've come back from Silicon Valley going around the tech companies. I had the real privilege spending a bit of time with Meg Whitman who runs Hewlett-Packard.

Whitman describes this shift and disruption. She says it's a tectonic shift in the plate. I certainly see that and believe the disruption in our sector is more accelerated than we've seen for a while. There's lots of different payment engines. I learnt a lot about bitcoin.

There's a whole pile of people who think bitcoin is lunacy, but some smart people who are thinking about the protocols of an internet currency. It was eye-opening. I go quite a lot - but this time, more than other times, you can see some real traction in some of this disruption. I think we're ready for it. I think ASB is ready for it and New Zealand is ready for it.

Where specifically do you expect disruption to impact on banking?

Mainly around payments. There's a bit of disruption around lending: social lending, crowd-source lending and stuff. The major change is that if you think about things like Apple Pay, PayPal, NFC technology (near-field communication - known here as payWave) and things embedded in your phones.

A credit card will be in the chip of the phone pretty soon - I think it is there now, we just need to activate it. All this technology makes things so different.

Is this new technology and disruption a threat to banks?

I don't think it's a threat to banks; we just need to make sure we stay relevant in the payment space. If you think about how the payments base works, you don't see any disruptive company offering cheques.

Banks are left with cash, cheque, eftpos, card, internet-based payments - we're covering a lot. I do think some of these things are going to have to switch off. There is a huge investment in keeping something like a cheque engine running for the diminishing number of transactions that are going through it.

Are businesses still writing cheques?

There are some entrenched businesses still issuing cheques. There's quite a few people not comfortable with internet banking. We're not there yet, but it's not far away. I think we need a chequebook amnesty! We'll destroy them for you.

Where else did you go in the United States?

We went up to Microsoft in Seattle, they're doing interesting things around Cloud and data, research, and machine learning. We went to very non-traditional things like Airbnb to have have a look at how they're disrupting the hotel market. It's important as a bank that we don't just look at banks, we look at where the disruption is going on in sectors around us, and how that might impact on us. It was fascinating. I could talk about tech for hours.

We look at what it is we can do for our customers with technology. We always put on a customer lens. There's no point having technology no one needs or wants; [what can we] bring forward to our customers to make it simpler and easier to do business with us?

What is the idea that centrally drives what you are doing with the bank?

I think the idea is that it's from an observation of what our consumers are doing. Consumers are interfacing less and less through physical channels and more and more through digital channels. If you think about how you buy a book, you possibly go to a book shop, but you're more than likely to go to Amazon and get it shot down to your tablet.

Consumers are very used to purchasing through digital channels, through mobile channels. We've got to think. "Okay, what are the disruptive banking technologies that will enable consumers to interface with a bank the same way they now interface with a bookshop?"

Because sitting there with your shop front, that world has changed. We need the shop front, we definitely need that. How do we make product sales in a mobile environment and digital environment?

For our sector there's a whole lot of complications around customer ID and onboarding of customers and anti-money laundering and those sorts of things that we just have to get our heads around and get in front of, so that those things don't become barriers for what consumers are wanting to do. That's really the driving force though, that this is how consumers are behaving and we need to stay relevant.