Banking Sector Risk Management Strategies

The assignment delves into risk management practices within the Australian banking system. It analyzes the impact of global financial crises on bank efficiency and scrutinizes IT multi-sourcing strategies as potential risks. The analysis draws upon academic research and reports from organizations like the Treasury of the Commonwealth of Australia, providing insights into regulatory frameworks and governance structures shaping the sector.

Running head: STRATEGIC INFORMATION SYSTEM OF ANZ BANK
Strategic Information System of ANZ Bank
Name of the Student
Name of the University
Author’s Note:

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STRATEGIC INFORMATION SYSTEM OF ANZ BANK
Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................3
1. Business Processes...................................................................................................................3
2. Business Requirements............................................................................................................5
3. System Requirements..............................................................................................................6
4. Software and Vendor Selection...............................................................................................7
5. Three Approaches of Technology for Improving Business Efficiency...................................9
6. Level of Efficiency of Technology Implementation.............................................................10
7. Potential Security Risks and Data Breaches..........................................................................10
8. Guidelines to Mitigate Risks.................................................................................................11
Conclusion.....................................................................................................................................11
References......................................................................................................................................13
Bibliography..................................................................................................................................15

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Introduction
ANZ Bank New Zealand Limited is one of the largest banks of in New Zealand. It does
its job as a subordinate of Australia and New Zealand Banking Group Limited of Australia.
Formerly, it was a part of the combination of the famous National Bank of New Zealand and
ANZ Banking Group ("About us | ANZ", 2017). The main job of this recognized bank is to
provide financial services like loans, investments, asset finance and solutions of payments. The
ANZ Bank has 550,000 shareholders. The domestic shareholders are 72.5 percent whereas the
rest 27.5 percent are retail shareholders. The main shareholders of the bank are the Visa New
Zealand Limited or VNZL and Interchange and Settlement Limited or ISL. The VNZL allows
access to the network of Visa International and the ISL is the chief and main operator for the
processing system of payment and that utilized for inter banking transactions. The ANZ Bank
was found in the year 1840 and it gained its name in the year 1951 after merging with the Bank
of Australia and Union Bank of Australia (Bowman et al., 2017). The bank has a total capital of
approximately 93.4 billion Australian dollars and it has the total asset of about 896.5 billion
Australian dollars. It has its branches in worldwide including in America, New Zealand,
Australia, Pacific, Europe and Middle East. The total numbers of employees working in the bank
is approximately 46000 as per a report of March 31, 2017.
The following business report outlines a brief discussion on the famous and recognized
bank of New Zealand the ANZ Bank. The report helps to understand the processes of selecting
Enterprise Resource Planning or ERP software for their investment in information system. The
report clearly defines the business processes and the business and systems requirements. The
appropriate vendor and software selection is also mentioned here. The report also provides three

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distinct ways how ANZ bank should utilize technologies for improving their business
efficiencies. The business report further evaluates the probable security risks and breaches and
the possible measures for mitigating them.
Discussion
1. Business Processes
The collection of all kinds of inter linked or interrelated tasks or jobs that help to reach or
satisfy a customer’s requirements is known as a business process. It is normally a series of
several and various actions or activities, which after completing will obtain the organizations
goals and objectives (Chuang & Hu, 2015). It can be represented as the series of activities or a
flowchart of all the activities that will help a particular organization to reach its goals and
objectives. Every organization has its own business processes. These are changed from time to
time with respect to the requirements and market trends of the business. The business processes
can turn out to be the advantages as well as the disadvantages as one single mistake can lead the
organization to a great organizational problem. The Australia and New Zealand Banking Group
Limited or ANZ Bank has its own distinct business processes that have made this bank popular
and famous. Several recognized strategies are followed by this bank. Since the financial year
2008, this bank has undertaken several recognized fundamental alterations in their business
processes. The major strategy of this bank is that they should utilize the stronger substructure of
services of New Zealand and Australia ("About us | ANZ", 2017). These services can lead the
bank in the top most level in the banking market. The banks mainly deal with its customers. If
the customers or the clients of the banks are not happy with them, it is evident that they would
not come to the banks and the shares of the banks will fall down. The second important strategy

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of ANZ Bank is to serve the customers perfectly by fulfilling all their needs and requirements.
This will in case increase the regional trade and the flow of capital in the bank. The Australia and
New Zealand Bank has three major components in their strategy of business process (Klettner,
Clarke & Boersma, 2014). They are as follows:
a) Fulfill Customer Requirements: They want to make a bank that will be able to serve
all the customers and also to all organizations irrespective of their sizes.
b) Worldwide Bank: They want to make a bank that would be present worldwide for the
customers and are driven by the regional trade and flows of capital.
c) Digital Infrastructure: They want to create such a bank that will have the best digital
infrastructure so that it can easily deal with the experience, scale and management of the
customers.
The above-mentioned strategies of business process should have the ability for risk
management and provide perfect quality for their customers (Bowman et al., 2017). This risk
management feature will help the bank to control and mitigate their probable risks.
The ANZ Bank even has several strategic properties. These properties are as follows:
a) Balanced Bank: The first strategic property of this bank is to make a bank that does
not have complexities in the management and can easily reduce and mitigate the operating costs
and risks.
b) Focus on Smaller Businesses: The second important strategic property of this bank is
to focus and aim on the smaller businesses in Australia and New Zealand. This is done because

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the bank believes that the main customers are the smaller businesses as they have less risk of
losses in the business.
c) Maintenance of Ethics: Any organization becomes popular by following simple ethics
and moral values in their business. The ANZ bank believes that they can attain their
organizational goals by following the organizational ethics and moral values. This is their third
strategic property.
2. Business Requirements
Business requirements are those requirements of a business that are needed for producing
a value. The delivery or satisfaction of business requirements are done by several distinct ways
like systems, products, processes and software (Klettner, Clarke & Boersma, 2014). These
business requirements are not the objectives of a business but are procedure of obtaining the
objectives. The business requirements required for the Australia and New Zealand Banking
Group Limited are mentioned below.
The business requirement of any bank is needed to understand the in which sector the
bank is wanting to open. When this decision is clear that is the need is clear for the bank, the
managing directors of the bank make the strategic plan. Any organization obtains its objectives
and goals by its innovative and distinct strategic plan. Then the top management of the bank
makes sure that all the employees and the staff members of the bank are following the rules and
regulations. The main thing that is needed for opening up a bank like ANZ is the bulk amount of
money ("About us | ANZ", 2017). The capital should be enough for the bank so that there would
no problem in their processes. Any organization takes time to gain its popularity amongst the
customers. The capital would be the savior of the bank till it does not gain many customers.

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Once, the bank gains the approval from the top management, a summary plan is made for the
business. This plan contains all the policies and processes of the bank that are to be followed in
the next five years. A legal team is also present for the bank to look after all the legal matters so
that there exists no loopholes in their system. The risk management principles are also required
to reduce the probable risks that can occur in the bank. The governing body will look after the
processes so that there are no problems in the planning phase.
3. System Requirements
The system requirements can be defined as the hardware and software of a system
required for an organization or a business to obtain the organizational or business goals and
objectives. These are often utilized as guidelines to meet the objectives. For a bank like Australia
and New Zealand Bank, the system requirements are the most important components (Chuang &
Hu, 2015). These are required not only for that bank authority but also for the customers. The
main banking system in today’s world is the Internet banking. All types of transactions are done
by Internet banking. The ANZ Bank has a flexible system infrastructure that can work in almost
every available browser in the market. The application of the bank works well with Google
Chrome, Mozilla Firefox, Internet Explorer, Opera and Safari Browser. Google Chrome can
work with operating systems like Mac OSX, Windows 10, Windows 8 and Windows 7. Mozilla
Firefox can work with all operating system available in the market and is considered as the most
flexible browser. Internet Explorer can work with Windows 10, Windows 8 and Windows 7.
Safari Browser can only work with Mac OSX whereas Opera can only work with Windows 10
and Windows 7. Apart from the computers and the laptops, this application even runs well on
tablets and smart phones. The users will have to download the application of Australia and New
Zealand Banking Group Limited in their smart phones and tablets and they will be able to access

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the Internet banking easily. The application is extremely safe and secured for any system
(Klettner, Clarke & Boersma, 2014). The application runs well on every browser of the smart
phones and tablets with utmost speed. The users have to login to their account for access the
Internet banking. However, the only condition for this application is that the system should be
updated. The website of the ANZ Bank does not support the older or the beta versions of the
browsers. It even does not support the other open source browsers that are made by the beta
versions. The only limitation in the website of this bank is that the technical team cannot fix the
problems in the browsers.
4. Software and Vendor Selection
The main and the most important decision for any organization is the selection of
software and vendor. If there is any mistake in this decision, it is evident that there will be a
problem in the overall business process and procedures. The scenario is absolutely similar for
ANZ bank (Cummings & Durrani, 2016). They have selected their vendor and software in such a
way so that there exists no loophole in the business process. The software selection of the ANZ
bank is done on the basis of enterprise resource planning or ERP, customer relationship
management or CRM, payroll, human resources, marketing, finance, investment, insurance and
many more. The selection of the software system is done by following six major steps. They are
as follows:
i) To Recognize Resources: The resources should be known to all the organizational
members. The resources mainly include the technological, financial, availability and staffing.
ii) Identification of Stakeholders: The stakeholders of the bank should be identified
(Krajewski, Ritzman & Malhotra, 2013). They include the top management, audit departments,

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STRATEGIC INFORMATION SYSTEM OF ANZ BANK
loan servicing, compliance departments, branch managers, lenders, legal advisors and many
more.
iii) Analysis of the Requirements: This is the most important step for selection of
software. If the needs or the requirements will not be clear, it is impossible to select any software
or system.
iv) Evaluation and Selection of Vendor: In this step, all the top vendors are evaluated
and the best and the most suitable vendor is selected for the organization (Ravichandran, Taylor
& Waterhouse, 2016). The main point that is kept in mind is that there the vendor should be cost
effective.
v) Implementation: In the fifth step, finally the software is implemented in the
organization for obtaining the organizational goals and objectives.
vi) Communication: Even if a particular vendor is selected and the software is
implemented in the organization, they should not stop looking for others (Coles-Kemp & Hall,
2016). The bank should keep a stable communication with the other vendors and the
stakeholders for better software in future. This will help them to keep the system updated and be
on the top in the near future.
The software selected by ANZ Bank is the Misys Loan IQ. This software helps the
organization to operate its operations worldwide. The main advantage that the bank has obtained
by this software is that it has helped to control the main commercial loans for reaching the
amalgamated requirements of commercial, corporate and institutional segments of banking and
contribute all of them as wholesale (Minervini & Napier, 2013). It provides a set of normative
procedures for reduction of the management and operational risks. Misys Loan IQ provides

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STRATEGIC INFORMATION SYSTEM OF ANZ BANK
extremely vigorous flows of work. This software lends the entire business in a broad range from
any one platform. The software also gives the processes of operation for consolidating the
institutional and commercial businesses. The ANZ bank selected the Misys Loan IQ after short
listing all the top vendors of Australia and New Zealand.
5. Three Approaches of Technology for Improving Business Efficiency
The business efficiency of any organization is obtained by following perfect approaches
in technology. The three main ways that are utilized by ANZ Bank for improvement of the
business efficiency are as follows:
i) Monitoring of Customer Satisfaction Digitally: The customer satisfaction of the ANZ
Bank is monitored digitally so that the customers are always satisfied. The bank deals with the
customers. If the customers will not be happy with the services, it is evident that they will not be
coming to the bank anymore (Chuang & Hu, 2015). The moment the bank monitors any
dissatisfaction of the customers they try to resolve the problem as soon as possible. This in turn
improves the efficiency in their business. Positive impact of the bank is extremely required for
the bank as it will help to improve their business efficiency.
ii) Requirement of End to End Digitization: The bank has noticed that the customers are
dissatisfied mainly with the back office of the bank. There should an end to end digitization in
the ANZ bank to assure that the back office is able to complete all the task digitally and there is
no scope for errors.
iii) Go Global: This is the third and one of the most important approaches for improving
the business efficiency for any bank. The diversification in the organizational structure helps any
organization to obtain the organizational goals (Akman & Mishra, 2015). The ANZ bank has

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branches in America, New Zealand, Australia, Pacific, Europe and Middle East. This is making
the bank extremely popular and famous in all over the world.
6. Level of Efficiency of Technology Implementation
The level of efficiency should be high for the implementation of any technology. The
ANZ bank has undertaken three main approaches for improving their efficiencies. They have
faced several problems and issues for reduction of the cost. The technical team of ANZ bank
brings several applications in their company (Moradi-Motlagh & Babacan, 2015). These
applications help to integrate the entire system easily and also increase the demand of the
organization. However, soon the bank realized that this is not enough for their company. They
rather implemented several tools and technologies for the improvement of their efficiency. The
main limitation of the bank was the lack of asset repository. This was improved by the
technological implementation.
7. Potential Security Risks and Data Breaches
Risks and data breaches are common for any information system. The potential security
threats and data breaches for ANZ bank are as follows:
i) Phishing: This is the most significant risk that can occur in the information system of
any bank. In this type threat, the hacker or the intruder gets all the confidential data of the users.
This is mostly done by receiving fake and hoax emails (Chuang & Hu, 2015). The moment the
email is clicked to open, all the details are stolen and money is theft.
ii) Denial of Service: This type of risk is another significant risk that is caused when the
hacker or the intruder denied the service and this in turn slows down the entire process. This type
of attacks is very common in banks.

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8. Guidelines to Mitigate Risks
The above-mentioned risks and security threats can be mitigated by following several
measures. The mitigations of these risks are as follows:
i) Firewalls: As the name suggests, this type of security helps to stop the entire risks like
virus, Trojan and even phishing (Chuang & Hu, 2015). It detects and prevents the security risks.
These are installed in any system.
b) Antivirus: This is the simplest measure for mitigation of any security risk. It helps to
block and prevent the spreading of virus in any system easily.
Conclusion
Therefore, from the above business report it can be concluded that ANZ is one of the top
banks in Australia and New Zealand. It does its job as a subordinate of Australia and New
Zealand Banking Group Limited of Australia. Formerly, it was a part of the combination of the
famous National Bank of New Zealand and ANZ Banking Group. The main job of this
recognized bank is to provide financial services like loans, investments, asset finance and
solutions of payments. The ANZ Bank has 550,000 shareholders. The domestic shareholders are
72.5 percent whereas the rest 27.5 percent are retail shareholders. The main shareholders of the
bank are the Visa New Zealand Limited or VNZL and Interchange and Settlement Limited or
ISL. The VNZL allows access to the network of Visa International and the ISL is the chief and
main operator for the processing system of payment and that utilized for inter banking
transactions. The ANZ Bank was found in the year 1840 and it gained its name in the year 1951
after merging with the Bank of Australia and Union Bank of Australia. The bank has a total
capital of approximately 93.4 billion Australian dollars and it has the total asset of about 896.5

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STRATEGIC INFORMATION SYSTEM OF ANZ BANK
billion Australian dollars. It has its branches in worldwide including in America, New Zealand,
Australia, Pacific, Europe and Middle East. The total numbers of employees working in the bank
is approximately 46000 as per a report of March 31, 2017. The above report clearly defines the
business processes of ANZ bank with proper details. It also helps to understand the business and
system requirements of the bank. The report also provides the sequence of steps for the selection
of software for ANZ bank. The bank has selected the software of Misys Loan IQ as their main
system. This selection is done after evaluation of several top vendors existing in the world. The
budget is also checked before selecting any vendor. The report gives a brief description about the
ways of utilizing technologies for improvement of business efficiency. The potential risks of the
bank and the ways of mitigation are also mentioned in the business report.

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References
Anz.com (2017). About us | ANZ. Retrieved 21 September 2017, from
http://www.anz.com/about-us/?_ga=2.47580399.952793676.1505985687-
601482374.1505985687
Akman, I. & Mishra, A., (2015). Sector diversity in green information technology practices:
technology acceptance model perspective. Computers in human behavior, 49, pp.477-
486.
Bowman, D., Banks, M., Fela, G., Russell, R. & de Silva, A., (2017). Understanding financial
wellbeing in times of insecurity.
Chuang, C.C. & Hu, F.L., (2015). Technology Strategy-Innovating for Growth of ANZ
Bank. International Review of Management and Business Research, 4(3), p.682.
Coles-Kemp, L. & Hall, P., (2016). TREsPASS Book 2: Summer School.
Cummings, J.R. & Durrani, K.J., (2016). Effect of the Basel Accord capital requirements on the
loan-loss provisioning practices of Australian banks. Journal of Banking & Finance, 67,
pp.23-36.
Klettner, A., Clarke, T. & Boersma, M., (2014). The governance of corporate sustainability:
Empirical insights into the development, leadership and implementation of responsible
business strategy. Journal of Business Ethics, 122(1), pp.145-165.
Krajewski, L.J., Ritzman, L.P. & Malhotra, M.K., (2013). Operations management: processes
and supply chains (Vol. 1). New York, NY: Pearson.

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STRATEGIC INFORMATION SYSTEM OF ANZ BANK
Minervini, J. & Napier, C., (2013). Next generation MDM-the new 360 view.
Moradi-Motlagh, A. & Babacan, A., (2015). The impact of the global financial crisis on the
efficiency of Australian banks. Economic Modelling, 46, pp.397-406.
Ravichandran, A., Taylor, K. & Waterhouse, P., (2016). Manage. In DevOps for Digital
Leaders (pp. 105-122). Apress.

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STRATEGIC INFORMATION SYSTEM OF ANZ BANK
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