Abney and Associates, David Green: Banking on a new world of opportunities

The banking industry has a key role in helping business reach its new potential in a technology driven world, writes David Green.

One of the greatest benefits of technology is that it is making the world smaller.

Geographical distance need no longer be the disadvantage it once was, for individuals or businesses - or indeed countries.

This technology-driven revolution opens up opportunities for a nation like NZ, which has historically faced challenges that arise from our distance from key markets. Many of these opportunities have been further heightened by the reweighting of New Zealand's trading relationships towards the growing economies in the Asia Pacific region.

Eight of New Zealand's top 10 trading partners are now within this region, which has reduced the physical distance to our key markets. Geography is now increasingly on New Zealand's side.

As enablers of business, which increasingly operates without borders, modern banks have a key part to play in helping New Zealand reach this new potential, by bringing the country, its businesses and people closer to the world.

They need to challenge the industry's reputation for conservatism and become leaders in new technology and innovation that connects customers and provides new ways for them to do business seamlessly around the world, around the clock.

To be effective, this innovation needs to reflect the new ways companies in the 21st century are electing to do business.

Growing numbers of business leaders are adopting mobile technology based tools and solutions in many aspects of their lives, and many are looking to use the same technologies in their business dealings.

They want to be able to conduct business and make payments wherever they are and from the device of their choice.

The challenge for banks is to continually innovate and invest to enable this.

It was in recognition of these evolving business needs that ANZ became one of the first banks in the world to launch a wide-ranging mobile cash management solution, Transactive-Mobile. This enables businesses to use iPhone or Android devices to remotely monitor real-time account balances, view current and prior-day transactions, approve and release payments and obtain live FX rates across different countries.

One user - an Auckland-based food exporter - typifies how modern companies expect to do business. The business owner has accounts in New Zealand and Australia with ANZ, and with a local bank in Hong Kong. He views balances and transactions on all of them from his smart phone.

He uses his phone to approve payments from all his bank accounts, including the local bank in Hong Kong, for example to pay an offshore supplier or source materials. He can make payments in a range of currencies, including Chinese renminbi, from anywhere in the world where he can get a mobile or internet connection, using a laptop, tablet or mobile. Locations to date have included hotel rooms in several countries and even, on occasion, from his bach in the Coromandel.

The ultimate aim of a modern global bank in an ever more connected world should be to enable any customer to make any payment, any time, anywhere, and on any device.

Future banking solutions will need to be developed with the full range of digital devices in mind - a change from the traditional model which has seen them rolled out to mobile following an initial launch via more established channels.

Another evolving area of business-enabling innovation is using the information banks build up in dealing with individual clients to offer firms new solutions better tailored to their needs.

Banks will also have a growing ability to assist actively by providing clients with notifications that help them successfully run their business. For example, a text or other alerts from their bank to let them know when action is required, such as when the balance on a foreign currency account falls below a certain level. Such alerts will empower businesses to act swiftly on information that would otherwise require them to log in and manually check their accounts.

In adopting these innovations, larger clients will be looking to their bank to provide these services based on a global view, which mirrors the international, often complex, operations of the business.

But a world made smaller by technology is not without its challenges. One significant risk is that the same connectivity that makes life easier for global consumers and businesses is also attractive to international fraudsters.

The threat of data theft and other cyber-crime is ever-present in any part of a global operation.

Banks must ensure they stay ahead of the criminals and fraudsters, and can reassure their customers that global digital solutions continue to be secure and that client data will be handled with care. Banks must continue to invest in technology to monitor and identify fraud and use the tools and information at their disposal to actively alert clients of suspicious activity.

The challenges and opportunities presented to this country by global innovation are growing as rapidly as the world it enables is shrinking. What is clear for the banking sector is that banks play a very important role in ensuring New Zealand, its businesses and economy can reap the full potential of this new world of opportunities.