AI Powers Seven Percent of ANZ’s Code Development in Recent Months

ANZ Banking Group has reported a significant milestone in its ongoing technological transformation, with more than seven percent of the code written by artificial intelligence (AI) over the past six months. This announcement was made by CEO Shayne Elliott during the bank’s full-year results webcast for 2024. The development marks an important step in ANZ’s broader digital strategy, which is aimed at enhancing its technological infrastructure and positioning the bank to thrive in an increasingly AI-driven financial landscape.

The bank’s technology journey is driven by a workforce of 7,000 engineers, all of whom are involved in developing and enhancing ANZ’s core digital platforms: the digital retail bank ANZ Plus and the mid-to-enterprise corporate offering ANZ Transactive-Global. ANZ has invested significantly in these platforms over the past few years, with a reported $2.5 billion spent on platforms, tools, and other key technology stacks since 2019. This includes substantial investments to modernize its technology infrastructure and simplify its operations through cloud migration, vendor consolidation, and AI integration.

A key part of this transformation has been ANZ’s adoption of GitHub Copilot, a pair programming tool powered by AI, which the bank started using early on. In May 2023, ANZ formally launched a team dedicated to exploring the potential of generative AI. The use of GitHub Copilot has played a pivotal role in accelerating the bank’s software development, with the tool helping engineers write more efficient code by suggesting intelligent completions and automating aspects of the coding process.

The seven percent figure, while impressive, is expected to increase as AI becomes more deeply embedded in ANZ’s operations. Elliott pointed out that unlike many of its competitors who continue to grapple with outdated and costly legacy systems, ANZ’s ambition is to operate with the most modern and streamlined platforms, utilizing cutting-edge tools from top-tier partners such as Salesforce, ServiceNow, Adobe, AWS, and Zafin. This strategy positions ANZ as a leader in technological innovation within the banking industry, with a focus on leveraging AI to drive productivity and achieve a competitive advantage.

Elliott emphasized that the use of AI is central to ANZ’s vision of simplifying its operations. The bank is already working on AI prototypes with an unnamed AI “partner in Palo Alto, California,” as part of efforts to embed generative AI in its digital offerings like ANZ Plus. This partnership underscores the bank’s commitment to staying at the forefront of AI advancements and continuously improving its products and services for customers.

A major part of ANZ’s digital strategy involves a “dual platform future,” where the bank plans to migrate all its retail customers, including those from the recently acquired Suncorp, to ANZ Plus by 2028. This will be accompanied by a massive scaling effort for mid-to-enterprise customers, who will transition to the Transactive platform by 2026. The bank expects to decommission significant portions of its legacy systems, including those inherited from Suncorp, over the next year. These transitions are part of the bank’s broader goal of simplifying its technology ecosystem, reducing network costs, and ensuring that all customers are served through contemporary, cloud-based platforms.

In line with this transformation, ANZ continues to focus on AI and intelligent automation as critical drivers of operational efficiency. Elliott highlighted that AI will fundamentally change the way the bank operates, serves customers, and competes. In his view, AI’s impact on the banking industry will be even more profound than previous technological revolutions such as the rise of the web, mobile, and cloud computing. For ANZ, AI is not just a tool for automating routine tasks but a transformative force capable of driving a step change in productivity and providing a long-term competitive edge.

However, Elliott also cautioned that this competitive advantage would only be available to companies that have already made significant investments in modern technology and data platforms. He used the analogy of building a skyscraper, stating that one cannot build a strong foundation out of sand. This reflects ANZ’s belief that success in the age of AI will require substantial technological investments and infrastructure to support AI-powered solutions. In essence, AI and automation will become the backbone of competitive banking, but only for those who have laid the groundwork with the right technology.

ANZ’s long-term strategy is further bolstered by its recent financial performance. For FY24, the bank reported a net profit after tax of $6.3 billion, underscoring the effectiveness of its technology-driven transformation. The growth and efficiency gained from its investments in AI, cloud platforms, and software modernization are paying off, positioning ANZ as a leader in the evolving banking sector. As AI continues to evolve and become more integrated into the fabric of the bank’s operations, ANZ is set to remain at the forefront of technological innovation in banking.