August 5, 2025 • 25 mins
Sean Aylmer sits down with Westpac CEO Anthony Miller to find out everything he can about his world -from what it was like to be offered the role of a bank CEO, to what's surprised him about the job. The episode was recorded in front of a live audience, hosted by the Trans-Tasman Business Circle.
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Episode Transcript
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Speaker 1 (00:05):
Welcome to Fearing Greeds one on one. I'm Sean Almer.
Every week I sit down with a business leader and
find out everything I can about their world. This week's
guest is Westpac CEO Anthony Miller. The episode was recorded
in front of a live audience hosted by the Trans
Tasman Business Circle. Anthony, how did you find yourself of
(00:28):
Westpac five years ago? This was not on the horizon.
Speaker 2 (00:32):
It certainly wasn't. In fact, I think in some respects
in an accident that I ended up as CEO of Westpac.
I was working investment banking for a long time and
for various reasons, I was CEO of Deutsche Bank, and
I was spending a lot of time flying out of
Sydney because I was co head of Asia, so I
was on the plane all the time. And then COVID
arrived and for the first time in about five or
(00:54):
six years, I was, if you will, forced to stay
in Sydney for more than a couple weeks. And my
son had been college in the United States and he
had to come back. And that was at that time
when COVID first started. Your allowed to stay in your
own apartment if you had one, rather than a hotel,
and we hadn't been in the same room for more
than a week for a very long time, and it
was just such a It was just so great. And
(01:17):
I also recognized I needed to spend more time at
home and be more focused at home than I was,
and so I'd made this decision then I'm not going
to do once lockdown finishes, which I thought would be
two or three months, that I would continue at Deutsche Bank.
And literally as I made that decision, Peter King reached
(01:38):
out and said, I'd like you to think about being
head of the institutional business. And I would have done
that job in any circumstance, let alone when I've made
a decision that I didn't want to stay at Deutscher
for personal reason. So I then joined Westpac to run
the institutional business and it was a real pleasure. I
really enjoyed it, a huge amount of potential. Didn't think
(01:59):
it never fall that chief executive of the bank was
what they thought I might be able to do, they
being the board and and my colleagues. And then I
got an opportunity to run the business and wealth, and
I wished I'd been in the business banking much earlier
because that was just a joy. And then very fortunately
and I think graciously, I was given an opportunity to
(02:19):
be CEO. So only about twenty four months ago I
did a sort of land with me that actually, this
is an opportunity that I might focus on and really
go after.
Speaker 1 (02:29):
Now we'll get to some of the substantive issues in
a moment, but I'm going to drill into this. Do
you get a phone call? What happens that chair gives
you a ring and say hey, what are you doing?
Speaker 2 (02:38):
Yeah? Yeah, So he did ask me to go around
to his house, and I thought, well, this will either
mean I've been given an opportunity or I've been given
my pink slip and so and so he just said, look,
you know, the board had put me through an exercise.
Clearly there was external and internal candidates, and they had
(03:01):
I suppose landed or liked what I was thinking and
where I think we could go and what we could achieve.
And he said would you be And he sort of
framed it in a really interesting way and just said
would you be up for this? And it was the
right question because it is an enormous responsibility and an
enormous role and you have just got to be up
(03:23):
for it and very committed to it. And I had
to spend some time discussing with my wife and family
about that, and in particular because you know, you've got
to commit to this and give it everything, and I'm
lucky in that respect. Gredor was very supportive, and yeah,
I decided, yes, I'm up for it.
Speaker 1 (03:42):
And what's it like personally? So we talked about you
being a young CEO. You're not the youngest, so I
think you're almost a veteran among the big four. Yeah,
in that common really the only one of longer than
eighteen months or so. Andrew Irvine the other day kind
of found himself in the media for reasons. He didn't
want to be what's that spotlight like?
Speaker 2 (04:03):
Yeah, look, I thought that was very unfair and Andrew,
to be honest with you, have you said that I
do and always expected that there would be an element
of limelight because you are representing this company, and I
always thought that it would be quite an important responsibility
in terms of how you conducted yourself and how you
(04:24):
therefore needed to present yourself, and you would be constantly
looked out and chart and if you well examined as
to what you're doing. So I was well prepared for that.
And you know, there's a responsibility of being the CEO
for Australia's first bank, first company, it's oldest bank, it's
oldest company. And I always felt that way bit more importantly,
that just means and I always was ready for the
(04:46):
spotlight because I just think as a real responsibility in
running the company to ensure that I project myself and
I project the company in the right way that reflects
really well on the fact that we've got thirty five
thirty six thousand fabulousmployees.
Speaker 1 (05:01):
What surprised you about the job? And I'm leading you
down a canbra path here because I've asked you this before.
Speaker 2 (05:07):
So what we do at West Back, as we take
deposits and we lend money and we do a few
other things, I'm surprised at how much stuff other than
that is coming at me and is on the table.
And so I find it amazing the amount of external
(05:28):
constituents who are not shareholders, who are not employees, who
are not you know, in some many spects customers that
I have to engage with. And that's I anticipated having
to spend time in Canberra and spend time with regulators
and time with community and community leaders. But I was
a little bit surprised at how much is required. And
(05:49):
I had thought that maybe it was the political cycle
that was just at a peak as we led into
the election. But my sense is that it will be
it will remain ongoing, and so I've just got to
make sure I deliver.
Speaker 1 (06:01):
Okay or one of the country's biggest companies, one of
the biggest banks, we had an inflation figure this morning.
You may not have caught up point six percent for
the quarter annualized infation, close to the Reserve Bank's target.
What happens on interest.
Speaker 2 (06:14):
Rates, So I think that you know, the trim demean is.
It's the one that I think we should all fixate on.
The fact that it wasn't up probably is another data
point that reinforces it is open to the Reserve Bank
to cut rates. Having said that, it's still not overwhelming
(06:38):
in terms of where we are and where the inflationary
challenges are. And so therefore, while the market says and
is pricing something like ninety percent certainty of a rate cut,
and we are forecasting a rate cut in August and
November and two more next year. I think we see
to continue to remain thoughtful about the fact that the
(06:58):
Reserve Bank and the Reserve Bank governors done an exceptional job,
and it's very focused on is it the right time,
is the data where it needs to be to cut rates?
It feels like there's even more evidence now that they should.
But I can't help but think that army sort of
four weeks ago, everyone was absolutely clear that there was
a rate cut coming, and it didn't. And I think
(07:21):
we're lucky to have a Reserve Bank and a governor
with that independence and that confidence to continue to sort
of look after the country's long term interests. And in
many ways, the Reserve Bank's done an exceptional job when
you look at where we stand relative to our peers.
Speaker 1 (07:36):
In terms of what Westpac can bring to this debate.
The high frequency data, credit cards, debit cards, what's it
telling you about households, what's it telling you about businesses?
Speaker 2 (07:45):
Yeah, so we are in a very privy position because
you know, essentially twenty percent comes through Westpac, whether it
be payments, credit cards, mortgages, et cetera. So we have
a very good lens or insight as to what's going on.
Two things that sort of stand out is that those
indicators of stress, for example, ninety day delinquency mortgages continue
(08:10):
to improve. They are at their worst in the middle
of last year and they continue to improve. But equally,
on the business book side, again things continue to improve,
and so stress levels continue to be lower. That's not
to diminish, or if you will, demean, the fact that
it's still very hard going. But we are starting to
(08:33):
see improvements right across every aspect of the business. And
you know, some of the growth that we're seeing in
business lending is very encouraging in terms of the appetitive businesses,
which are the critical engine room of growth and jobs
in the country, as much more positive than perhaps the
headlines and the narrative that you see in the media
(08:54):
day in day out. Have you said all that, you know,
it is still challenging for a small businesses where we
define that as less than twenty employees, it still looks
like it's hard going in terms of their cash flow position.
For businesses larger than that, they're in a better position,
and so that's encouraging, but it's still not uniform across
(09:15):
the market.
Speaker 1 (09:17):
So let's move on to Westpac itself and your earnings.
When you're a big bank in Australia, you have incredible momentum.
How do you grow earnings when you have so much
competition and lead the share price out of it at the moment?
And what people are thinking banks, reminders, free healthcare, et cetera,
purely your business. How do you grow earnings when you
(09:38):
have such a tough market? A lot of people laugh
the small and medium sized business market at the moment.
What do you do?
Speaker 2 (09:45):
So that is the exam question that's leveled at me
by the board and the owners. We certainly we have
some unique advantages at Westpac. One is we have ten
million customers and as we look at whether those customers
are on how they think of us, only about a
(10:07):
third of them at the moment think of us as
their main financial institution the MFI measure. And so I've
got millions of customers where I'm not doing anything really
substantive for them. There's so much more I can do
with them. And importantly, it's not an adventurous challenge to
and we're not creating new products or new services. It's
(10:30):
literally doing what we do very well with an existing
cohort of customers. One third of our existing customers recognize
us as MFI. I've just got to now replicate that
and roll that out across all of my customers. And
all of that is the way I grow earnings and
how I grow the business, and more importantly, I grow
it safely and sustainably, because doing more of what you
(10:50):
do well with your existing customers is probably one of
the safest ways to grow a business.
Speaker 1 (10:57):
Okay, but how do you do that? So you invent.
Speaker 2 (11:00):
So one of the things we need to do and
we are doing, is that we are slightly underweight in
banker numbers. So I want to say banker numbers, I
mean customer facing roles, and so we are actively investing
in adding bankers that can and will speak to customers.
We have an outstanding feature which is our app, which
(11:22):
is sort of number one ranked in terms of features,
but there's so many aspects of how our app is
currently configured which we can improve which will make that
service proposition even more attractive. And then more importantly, what
we are going to go after, and it's something that's
we're very focused on, is how do we make sure
that when we connect with the customer in every interaction,
(11:43):
we bring the whole bank and so that we're not
sort of just a product centric engagement with the customer.
We're thinking about the customer and yes, you've got a
mortgage with us, but gee, your transactional account, you could
do this with that? Or would you like a credit
card or would you like this incremental bank product that
I've got available, And we're thinking about the whole of
(12:03):
the customer. And if we can do that, that's that
is how we will start to capture the advantage, which
is I've got ten million customers. I've just got to
do more with them.
Speaker 1 (12:14):
Something you said, they're getting more bankers out there. How
does that work in an AI world where apparently we're
all going to lose our jobs, well most of us anyway,
we're going to lose our jobs due to AI. And
if we actually bring that back, a lot of the
process roles will go to AI. How do those two
(12:34):
gel Well.
Speaker 2 (12:36):
I think a couple of things. I mean, ninety six
percent of what people do with the bank they want
to do digitally and online today, and so we need
to recognize that's just foundational. It's not a differentiator to
have an app or to have an automated process that's
actually table stakes, and certainly AI will only amplify that
(12:59):
idea year of automated straight through and contribute to that.
But what we and what I think is really important,
is to think about what AI is and how it
should be used, which is a tool, and a tool
is only really as good as the person who's been
equipped or trained and set up to use that tool.
(13:21):
And so what we come back to is that it's
about it's a people's game banking today and will in
the future ever more so be a people game. And
so we've got to get much more organized and much
more invested in our people and how they're led and
how they're motivated and how they're inspired to deliver. And
I feel like that's where we've got to go in
(13:42):
terms of delivering that differentiation that puts us in the
right place.
Speaker 1 (13:47):
Well, I have as much to do with a person
at Westpac in the future as I did previously, and
I am a customer Westpac. I can say that, and
what's that interaction going to be like? Like, in a sense,
is it more or less important than direct.
Speaker 2 (14:00):
So where we intend to go is that's for you.
It's for you to choose. It's not for me to
impose upon you, but for me to provide what you want.
And if it's the case that you'd like that human interaction,
I need to make sure I can do that and
can do that in a way that is safe and
responsible in services your needs. So that's the ambition or
(14:23):
the challenge for us is how do I design and
set up that interaction between our digital offering, our virtual
offering which is call center when you call in, and
the physical offering and how do I get that balance right?
And for different customers, they will all quite different things,
and I've got to be good enough and we as
a bank, I've got to be good enough to be
able to do what they want as opposed to doing
(14:46):
what I want. And so that's what we're working on.
Speaker 1 (14:49):
We're going to pause there and take a quick break
back in a moment. This is fear and greed at
one on one with Westpac CEO Anthony Miller. My bank
analyst friends would be very upset with me if I
didn't ask about cost control, because banking is about cost
(15:10):
control to some extent, particularly when growth is harder to
come by. What's Westpac doing there?
Speaker 2 (15:16):
So cost control is for any company, any executive. It's
literally the job description. And one of the challenges at Westpac,
and you know, I see a number of the executives
in the room. I think in the past, the way
we thought about cost control was all right, we need
to cut costs and hit our numbers for the half.
(15:38):
And so what would end up happening People would stop something,
They would just immediately cancel something, and all they were
doing was deferring something so that you hit your number
for the half. What we're trying to do and the
way we're going after it at the bank now and
as we go forward is well, first and foremost, let's
look at the process and the work and the activity
(15:58):
we're undertaking, and let's get that to the best possible
state it could be. Get that as streamlined and as
efficient as it should be, making sure we meet our
regulatory obligations, and we do it for the customer, and
the costs fall out off the back of that. And
so the focus is how do I organize processes, how
(16:20):
do we make sure the way we do things is streamlined,
and then the cost will follow. And then of course
what you then find is're very clear about well, it's
very clear that I have to spend that money to
do that process now that I've optimized it as I have,
and then you need to be very honest with yourself.
But the return I get with that product or service
(16:42):
I provide now that I've optimized it, if it doesn't
make the return I needed to make for the shareholder,
I'll need to be honest. Should I stay in that,
should I exit that? And that's what we will be
focused on is making sure we have the best processes
streamlined and optimized as they need to be, make sure
we always deliver for the customer in a safe, sustainable way.
(17:04):
And then, of course, if the return generated is not
acceptable over the long term, then we will need to
make other decisions.
Speaker 1 (17:12):
Okay, let's go back to artificial intelligence broadly. How do
you think about it and how do you think about
it for the bank?
Speaker 2 (17:20):
So, the hype around artificial intelligence is quite amazing, and
I joke often that if I had a dollar for
every management consultant's pitch, I could retire. And it is amazing.
There is no doubt that the hype is excessive, but
its potential and what it can do is remarkable, and
(17:41):
so we're very much focused on how are we using
it now. We have been using versions of artificial intelligence
for a long time machine learning, data analytics, data determined decisions, etc.
And then we've had AI. Now we've got generative AI,
and then we've got the edgentic version of that. And
so the implementation and use of AI is something that's
(18:03):
part of the company and now we want to sort
of go further. And so the way we're approaching it is,
first of all, I want it to be something that
everyone recognizes is a priority for the company. So therefore
I've said our data data analytics AI role. I've been
able to hire the best in the market to take
on that role. He will report to me and that'll
(18:25):
be partly and this is the first time that role
does report to achieve executive Albeit one of our peers
copied ust recently and that's a signal to the company
about how important this is. The second thing is is that,
as I said earlier, it's a tool, and so it's
no good just saying, oh, we're going to put in AI.
What we need to do is make sure that everyone
(18:46):
is equipped with trained, inspired, motivated and led to use
this tool to improve outcomes. And I think the way
we are going to go after the AI is that
it works best where you have a superb process. You've
got to get your processes right, You've got to have
your data in the right place, organized in the right way,
and then you've got to have the team organized and
(19:09):
inspired to take that tool and go faster and do
more and do better. And therefore, what we're going to
do is very much focus on what areas can we achieve,
what areas should we prioritize, Prove it to ourselves, prove
it to our people, and then start to roll it
out more broadly across the company.
Speaker 1 (19:28):
You're talking about the opportunities. Do you see it as
a threat at all?
Speaker 2 (19:33):
Yes, I do. I do think that the capacity or
the ability it gives other entities to be able to
do banking, which is a complicated, highly regulated industry, means
there is a risk that others might be able to
(19:56):
solve all of the regulatory requirements very cleanly, very simply,
with the right agentic program and capability, they and thus
they could enter the industry and start to dis intermediate us.
But that threat has been in front of us for
a long time that you know, you've got a very well,
very clean, very simple fintech targeting a particular segment of
(20:19):
the or what we offer to customers, or we've got
challenges that come in and just simply have one product
and one offering and they just go in a very
targeted way. So we've been battling and competing against that
for a long time. This is another version of that.
Speaker 1 (20:36):
Okay, let's move to some of the more general issues.
The climate change all of a sudden is back in
the news, has been for the last three or four
days since Barnaby Joy has introduced a private member's bill,
obviously a big issue for the opposition and that's the Libs.
At the same time, we have the UN Chief Scientists
coming and telling Anthony Alberanezi we need to do a
lot more. Where's Westpac up to on your this year
(21:00):
and next year of Scape Oneescape too at net zero
and where do you think we should go? Because as
Bowen said yesterday, getting there is a lot harder than
saying it.
Speaker 2 (21:12):
Absolutely. In terms of Westpac Scope one Scope too, we
set a commitment to reduce from a baseline of twenty
twenty one by seventy four percent by twenty thirty, so
we are well on track. In fact, we're ahead of that,
and so we're confident about delivering on that commitment, and
it's a commitment that is important and is in front
(21:33):
of everyone in the company in terms of how we're
organized and what we're going after. The great problem or
issue that's in front of us is the transition currently
and has for far too long been sort of thought
of as this imposition on the country, this impost upon us, Oh,
we have to transition, and therefore we're going to have
(21:54):
to go and do this investment, Whereas really I think
and how we're thinking about it and what we have,
for example in our productivity submission, is that this is
one of those fantastic moments for this country to transition.
We are one of those few countries in the world
that has that wonderful combination of we have a lot
(22:14):
of gas, and gas has a role in this transition.
Don't ignore that it has a role to play. We
have a wonderful, large landscape where there's a lot of
sun and there's a lot of renewable power available to us,
and so we're in a very privileged position. We could
and should be able to realize a goal of having
the cheapest, most reliable, most attractive from an emission standard
(22:40):
energy generation, storage and distribution of any country in the world.
That should be ambition. And then with that ambition the
opportunities it creates, the bill, the investment, the engineering, the financing, etc.
Just means it's a huge amount for the country to
go after. Importantly, if you have the cheapep it's most reliable,
(23:01):
most emissions responsible power capability, then all of a sudden,
things like, well, is that where I should put my
data center? As global companies think about, I'll have a
data center in my home jurisdiction. I need to have
a redundant data capability seeing in a safe first world
other jurisdiction, where can I go Look at Australia. Look
(23:22):
at how cheap, reliable and consistent and emissions responsible its
generation is. All of a sudden we become a destination
for many and we saw a little bit of that,
I think in the context of Amazon and the work
that the Prime Minister did there. So we've got to
turn this transition from woe mee, we have to transition
to it is an exceptional opportunity for this country to
(23:44):
differentiate itself and move forward and not become and not
be just a commodities lucky country, but a self determined
lucky country.
Speaker 1 (23:54):
So should that the government go harder, should it set
more aggressive targets for emissions abatement?
Speaker 2 (24:03):
I think that's something that is potentially available. But I
think why don't we go a little easier on ourselves
for the moment, which is, let's get ourselves organized as
we submit, as we saw in the submission on productivity,
what don't we make sure that our process is and
the way we are pursuing that goal, that we're meeting
(24:23):
a certain standard of excellence now. And if we can
deliver on that excellence now, then we've earnt the right
to say, let's have an even bolder or more aggressive
ambition in the future. So I feel like that's potentially
how we might approach it. But why don't we earn
the right to do that by just delivering on what
we've said? And as I say, there's so much within
(24:44):
our reach to help us get after it now that
you know, I would love the country to be more
excited about it as a great opportunity rather than some
great impost or challenge.
Speaker 1 (24:59):
That's the first half of my interview with Westpac's CEO,
Anthony Miller. Anthony was proudly hosted by the Trans Tasman
Business Circle for thirty three years. The circles been the
region's leading stakeholder engagement platform, connecting senior leaders across business,
government and community in Australia, New Zealand and Singapore and beyond.
With over two hundred and fifty high impact engagements annually,
(25:19):
the Circle shaped strategic conversation strengthens public private collaboration and
deepens cross border partnerships. Privately owned and proudly independent, the
Circle is powered by a team of senior professionals dedicated
to delivering meaningful, high trust experiences. Join me again next
week for the second half of this interview, including Anthony
Miller's take from what needs to be done to fix
the housing crisis. Remember to hit follow on the podcast
(25:42):
and subscribe to Fear and Greed's free daily newsletter at
Fearangreed dot com. Today you I'm sure, Aelma, and this
is Fear and Greed one on one
Welcome to Fearing Greeds one on one. I'm Sean Almer.
Every week I sit down with a business leader and
find out everything I can about their world. This week's
guest is Westpac CEO Anthony Miller. The episode was recorded
in front of a live audience hosted by the Trans
Tasman Business Circle. Anthony, how did you find yourself of
(00:28):
Westpac five years ago? This was not on the horizon.
Speaker 2 (00:32):
It certainly wasn't. In fact, I think in some respects
in an accident that I ended up as CEO of Westpac.
I was working investment banking for a long time and
for various reasons, I was CEO of Deutsche Bank, and
I was spending a lot of time flying out of
Sydney because I was co head of Asia, so I
was on the plane all the time. And then COVID
arrived and for the first time in about five or
(00:54):
six years, I was, if you will, forced to stay
in Sydney for more than a couple weeks. And my
son had been college in the United States and he
had to come back. And that was at that time
when COVID first started. Your allowed to stay in your
own apartment if you had one, rather than a hotel,
and we hadn't been in the same room for more
than a week for a very long time, and it
was just such a It was just so great. And
(01:17):
I also recognized I needed to spend more time at
home and be more focused at home than I was,
and so I'd made this decision then I'm not going
to do once lockdown finishes, which I thought would be
two or three months, that I would continue at Deutsche Bank.
And literally as I made that decision, Peter King reached
(01:38):
out and said, I'd like you to think about being
head of the institutional business. And I would have done
that job in any circumstance, let alone when I've made
a decision that I didn't want to stay at Deutscher
for personal reason. So I then joined Westpac to run
the institutional business and it was a real pleasure. I
really enjoyed it, a huge amount of potential. Didn't think
(01:59):
it never fall that chief executive of the bank was
what they thought I might be able to do, they
being the board and and my colleagues. And then I
got an opportunity to run the business and wealth, and
I wished I'd been in the business banking much earlier
because that was just a joy. And then very fortunately
and I think graciously, I was given an opportunity to
(02:19):
be CEO. So only about twenty four months ago I
did a sort of land with me that actually, this
is an opportunity that I might focus on and really
go after.
Speaker 1 (02:29):
Now we'll get to some of the substantive issues in
a moment, but I'm going to drill into this. Do
you get a phone call? What happens that chair gives
you a ring and say hey, what are you doing?
Speaker 2 (02:38):
Yeah? Yeah, So he did ask me to go around
to his house, and I thought, well, this will either
mean I've been given an opportunity or I've been given
my pink slip and so and so he just said, look,
you know, the board had put me through an exercise.
Clearly there was external and internal candidates, and they had
(03:01):
I suppose landed or liked what I was thinking and
where I think we could go and what we could achieve.
And he said would you be And he sort of
framed it in a really interesting way and just said
would you be up for this? And it was the
right question because it is an enormous responsibility and an
enormous role and you have just got to be up
(03:23):
for it and very committed to it. And I had
to spend some time discussing with my wife and family
about that, and in particular because you know, you've got
to commit to this and give it everything, and I'm
lucky in that respect. Gredor was very supportive, and yeah,
I decided, yes, I'm up for it.
Speaker 1 (03:42):
And what's it like personally? So we talked about you
being a young CEO. You're not the youngest, so I
think you're almost a veteran among the big four. Yeah,
in that common really the only one of longer than
eighteen months or so. Andrew Irvine the other day kind
of found himself in the media for reasons. He didn't
want to be what's that spotlight like?
Speaker 2 (04:03):
Yeah, look, I thought that was very unfair and Andrew,
to be honest with you, have you said that I
do and always expected that there would be an element
of limelight because you are representing this company, and I
always thought that it would be quite an important responsibility
in terms of how you conducted yourself and how you
(04:24):
therefore needed to present yourself, and you would be constantly
looked out and chart and if you well examined as
to what you're doing. So I was well prepared for that.
And you know, there's a responsibility of being the CEO
for Australia's first bank, first company, it's oldest bank, it's
oldest company. And I always felt that way bit more importantly,
that just means and I always was ready for the
(04:46):
spotlight because I just think as a real responsibility in
running the company to ensure that I project myself and
I project the company in the right way that reflects
really well on the fact that we've got thirty five
thirty six thousand fabulousmployees.
Speaker 1 (05:01):
What surprised you about the job? And I'm leading you
down a canbra path here because I've asked you this before.
Speaker 2 (05:07):
So what we do at West Back, as we take
deposits and we lend money and we do a few
other things, I'm surprised at how much stuff other than
that is coming at me and is on the table.
And so I find it amazing the amount of external
(05:28):
constituents who are not shareholders, who are not employees, who
are not you know, in some many spects customers that
I have to engage with. And that's I anticipated having
to spend time in Canberra and spend time with regulators
and time with community and community leaders. But I was
a little bit surprised at how much is required. And
(05:49):
I had thought that maybe it was the political cycle
that was just at a peak as we led into
the election. But my sense is that it will be
it will remain ongoing, and so I've just got to
make sure I deliver.
Speaker 1 (06:01):
Okay or one of the country's biggest companies, one of
the biggest banks, we had an inflation figure this morning.
You may not have caught up point six percent for
the quarter annualized infation, close to the Reserve Bank's target.
What happens on interest.
Speaker 2 (06:14):
Rates, So I think that you know, the trim demean is.
It's the one that I think we should all fixate on.
The fact that it wasn't up probably is another data
point that reinforces it is open to the Reserve Bank
to cut rates. Having said that, it's still not overwhelming
(06:38):
in terms of where we are and where the inflationary
challenges are. And so therefore, while the market says and
is pricing something like ninety percent certainty of a rate cut,
and we are forecasting a rate cut in August and
November and two more next year. I think we see
to continue to remain thoughtful about the fact that the
(06:58):
Reserve Bank and the Reserve Bank governors done an exceptional job,
and it's very focused on is it the right time,
is the data where it needs to be to cut rates?
It feels like there's even more evidence now that they should.
But I can't help but think that army sort of
four weeks ago, everyone was absolutely clear that there was
a rate cut coming, and it didn't. And I think
(07:21):
we're lucky to have a Reserve Bank and a governor
with that independence and that confidence to continue to sort
of look after the country's long term interests. And in
many ways, the Reserve Bank's done an exceptional job when
you look at where we stand relative to our peers.
Speaker 1 (07:36):
In terms of what Westpac can bring to this debate.
The high frequency data, credit cards, debit cards, what's it
telling you about households, what's it telling you about businesses?
Speaker 2 (07:45):
Yeah, so we are in a very privy position because
you know, essentially twenty percent comes through Westpac, whether it
be payments, credit cards, mortgages, et cetera. So we have
a very good lens or insight as to what's going on.
Two things that sort of stand out is that those
indicators of stress, for example, ninety day delinquency mortgages continue
(08:10):
to improve. They are at their worst in the middle
of last year and they continue to improve. But equally,
on the business book side, again things continue to improve,
and so stress levels continue to be lower. That's not
to diminish, or if you will, demean, the fact that
it's still very hard going. But we are starting to
(08:33):
see improvements right across every aspect of the business. And
you know, some of the growth that we're seeing in
business lending is very encouraging in terms of the appetitive businesses,
which are the critical engine room of growth and jobs
in the country, as much more positive than perhaps the
headlines and the narrative that you see in the media
(08:54):
day in day out. Have you said all that, you know,
it is still challenging for a small businesses where we
define that as less than twenty employees, it still looks
like it's hard going in terms of their cash flow position.
For businesses larger than that, they're in a better position,
and so that's encouraging, but it's still not uniform across
(09:15):
the market.
Speaker 1 (09:17):
So let's move on to Westpac itself and your earnings.
When you're a big bank in Australia, you have incredible momentum.
How do you grow earnings when you have so much
competition and lead the share price out of it at the moment?
And what people are thinking banks, reminders, free healthcare, et cetera,
purely your business. How do you grow earnings when you
(09:38):
have such a tough market? A lot of people laugh
the small and medium sized business market at the moment.
What do you do?
Speaker 2 (09:45):
So that is the exam question that's leveled at me
by the board and the owners. We certainly we have
some unique advantages at Westpac. One is we have ten
million customers and as we look at whether those customers
are on how they think of us, only about a
(10:07):
third of them at the moment think of us as
their main financial institution the MFI measure. And so I've
got millions of customers where I'm not doing anything really
substantive for them. There's so much more I can do
with them. And importantly, it's not an adventurous challenge to
and we're not creating new products or new services. It's
(10:30):
literally doing what we do very well with an existing
cohort of customers. One third of our existing customers recognize
us as MFI. I've just got to now replicate that
and roll that out across all of my customers. And
all of that is the way I grow earnings and
how I grow the business, and more importantly, I grow
it safely and sustainably, because doing more of what you
(10:50):
do well with your existing customers is probably one of
the safest ways to grow a business.
Speaker 1 (10:57):
Okay, but how do you do that? So you invent.
Speaker 2 (11:00):
So one of the things we need to do and
we are doing, is that we are slightly underweight in
banker numbers. So I want to say banker numbers, I
mean customer facing roles, and so we are actively investing
in adding bankers that can and will speak to customers.
We have an outstanding feature which is our app, which
(11:22):
is sort of number one ranked in terms of features,
but there's so many aspects of how our app is
currently configured which we can improve which will make that
service proposition even more attractive. And then more importantly, what
we are going to go after, and it's something that's
we're very focused on, is how do we make sure
that when we connect with the customer in every interaction,
(11:43):
we bring the whole bank and so that we're not
sort of just a product centric engagement with the customer.
We're thinking about the customer and yes, you've got a
mortgage with us, but gee, your transactional account, you could
do this with that? Or would you like a credit
card or would you like this incremental bank product that
I've got available, And we're thinking about the whole of
(12:03):
the customer. And if we can do that, that's that
is how we will start to capture the advantage, which
is I've got ten million customers. I've just got to
do more with them.
Speaker 1 (12:14):
Something you said, they're getting more bankers out there. How
does that work in an AI world where apparently we're
all going to lose our jobs, well most of us anyway,
we're going to lose our jobs due to AI. And
if we actually bring that back, a lot of the
process roles will go to AI. How do those two
(12:34):
gel Well.
Speaker 2 (12:36):
I think a couple of things. I mean, ninety six
percent of what people do with the bank they want
to do digitally and online today, and so we need
to recognize that's just foundational. It's not a differentiator to
have an app or to have an automated process that's
actually table stakes, and certainly AI will only amplify that
(12:59):
idea year of automated straight through and contribute to that.
But what we and what I think is really important,
is to think about what AI is and how it
should be used, which is a tool, and a tool
is only really as good as the person who's been
equipped or trained and set up to use that tool.
(13:21):
And so what we come back to is that it's
about it's a people's game banking today and will in
the future ever more so be a people game. And
so we've got to get much more organized and much
more invested in our people and how they're led and
how they're motivated and how they're inspired to deliver. And
I feel like that's where we've got to go in
(13:42):
terms of delivering that differentiation that puts us in the
right place.
Speaker 1 (13:47):
Well, I have as much to do with a person
at Westpac in the future as I did previously, and
I am a customer Westpac. I can say that, and
what's that interaction going to be like? Like, in a sense,
is it more or less important than direct.
Speaker 2 (14:00):
So where we intend to go is that's for you.
It's for you to choose. It's not for me to
impose upon you, but for me to provide what you want.
And if it's the case that you'd like that human interaction,
I need to make sure I can do that and
can do that in a way that is safe and
responsible in services your needs. So that's the ambition or
(14:23):
the challenge for us is how do I design and
set up that interaction between our digital offering, our virtual
offering which is call center when you call in, and
the physical offering and how do I get that balance right?
And for different customers, they will all quite different things,
and I've got to be good enough and we as
a bank, I've got to be good enough to be
able to do what they want as opposed to doing
(14:46):
what I want. And so that's what we're working on.
Speaker 1 (14:49):
We're going to pause there and take a quick break
back in a moment. This is fear and greed at
one on one with Westpac CEO Anthony Miller. My bank
analyst friends would be very upset with me if I
didn't ask about cost control, because banking is about cost
(15:10):
control to some extent, particularly when growth is harder to
come by. What's Westpac doing there?
Speaker 2 (15:16):
So cost control is for any company, any executive. It's
literally the job description. And one of the challenges at Westpac,
and you know, I see a number of the executives
in the room. I think in the past, the way
we thought about cost control was all right, we need
to cut costs and hit our numbers for the half.
(15:38):
And so what would end up happening People would stop something,
They would just immediately cancel something, and all they were
doing was deferring something so that you hit your number
for the half. What we're trying to do and the
way we're going after it at the bank now and
as we go forward is well, first and foremost, let's
look at the process and the work and the activity
(15:58):
we're undertaking, and let's get that to the best possible
state it could be. Get that as streamlined and as
efficient as it should be, making sure we meet our
regulatory obligations, and we do it for the customer, and
the costs fall out off the back of that. And
so the focus is how do I organize processes, how
(16:20):
do we make sure the way we do things is streamlined,
and then the cost will follow. And then of course
what you then find is're very clear about well, it's
very clear that I have to spend that money to
do that process now that I've optimized it as I have,
and then you need to be very honest with yourself.
But the return I get with that product or service
(16:42):
I provide now that I've optimized it, if it doesn't
make the return I needed to make for the shareholder,
I'll need to be honest. Should I stay in that,
should I exit that? And that's what we will be
focused on is making sure we have the best processes
streamlined and optimized as they need to be, make sure
we always deliver for the customer in a safe, sustainable way.
(17:04):
And then, of course, if the return generated is not
acceptable over the long term, then we will need to
make other decisions.
Speaker 1 (17:12):
Okay, let's go back to artificial intelligence broadly. How do
you think about it and how do you think about
it for the bank?
Speaker 2 (17:20):
So, the hype around artificial intelligence is quite amazing, and
I joke often that if I had a dollar for
every management consultant's pitch, I could retire. And it is amazing.
There is no doubt that the hype is excessive, but
its potential and what it can do is remarkable, and
(17:41):
so we're very much focused on how are we using
it now. We have been using versions of artificial intelligence
for a long time machine learning, data analytics, data determined decisions, etc.
And then we've had AI. Now we've got generative AI,
and then we've got the edgentic version of that. And
so the implementation and use of AI is something that's
(18:03):
part of the company and now we want to sort
of go further. And so the way we're approaching it is,
first of all, I want it to be something that
everyone recognizes is a priority for the company. So therefore
I've said our data data analytics AI role. I've been
able to hire the best in the market to take
on that role. He will report to me and that'll
(18:25):
be partly and this is the first time that role
does report to achieve executive Albeit one of our peers
copied ust recently and that's a signal to the company
about how important this is. The second thing is is that,
as I said earlier, it's a tool, and so it's
no good just saying, oh, we're going to put in AI.
What we need to do is make sure that everyone
(18:46):
is equipped with trained, inspired, motivated and led to use
this tool to improve outcomes. And I think the way
we are going to go after the AI is that
it works best where you have a superb process. You've
got to get your processes right, You've got to have
your data in the right place, organized in the right way,
and then you've got to have the team organized and
(19:09):
inspired to take that tool and go faster and do
more and do better. And therefore, what we're going to
do is very much focus on what areas can we achieve,
what areas should we prioritize, Prove it to ourselves, prove
it to our people, and then start to roll it
out more broadly across the company.
Speaker 1 (19:28):
You're talking about the opportunities. Do you see it as
a threat at all?
Speaker 2 (19:33):
Yes, I do. I do think that the capacity or
the ability it gives other entities to be able to
do banking, which is a complicated, highly regulated industry, means
there is a risk that others might be able to
(19:56):
solve all of the regulatory requirements very cleanly, very simply,
with the right agentic program and capability, they and thus
they could enter the industry and start to dis intermediate us.
But that threat has been in front of us for
a long time that you know, you've got a very well,
very clean, very simple fintech targeting a particular segment of
(20:19):
the or what we offer to customers, or we've got
challenges that come in and just simply have one product
and one offering and they just go in a very
targeted way. So we've been battling and competing against that
for a long time. This is another version of that.
Speaker 1 (20:36):
Okay, let's move to some of the more general issues.
The climate change all of a sudden is back in
the news, has been for the last three or four
days since Barnaby Joy has introduced a private member's bill,
obviously a big issue for the opposition and that's the Libs.
At the same time, we have the UN Chief Scientists
coming and telling Anthony Alberanezi we need to do a
lot more. Where's Westpac up to on your this year
(21:00):
and next year of Scape Oneescape too at net zero
and where do you think we should go? Because as
Bowen said yesterday, getting there is a lot harder than
saying it.
Speaker 2 (21:12):
Absolutely. In terms of Westpac Scope one Scope too, we
set a commitment to reduce from a baseline of twenty
twenty one by seventy four percent by twenty thirty, so
we are well on track. In fact, we're ahead of that,
and so we're confident about delivering on that commitment, and
it's a commitment that is important and is in front
(21:33):
of everyone in the company in terms of how we're
organized and what we're going after. The great problem or
issue that's in front of us is the transition currently
and has for far too long been sort of thought
of as this imposition on the country, this impost upon us, Oh,
we have to transition, and therefore we're going to have
(21:54):
to go and do this investment, Whereas really I think
and how we're thinking about it and what we have,
for example in our productivity submission, is that this is
one of those fantastic moments for this country to transition.
We are one of those few countries in the world
that has that wonderful combination of we have a lot
(22:14):
of gas, and gas has a role in this transition.
Don't ignore that it has a role to play. We
have a wonderful, large landscape where there's a lot of
sun and there's a lot of renewable power available to us,
and so we're in a very privileged position. We could
and should be able to realize a goal of having
the cheapest, most reliable, most attractive from an emission standard
(22:40):
energy generation, storage and distribution of any country in the world.
That should be ambition. And then with that ambition the
opportunities it creates, the bill, the investment, the engineering, the financing, etc.
Just means it's a huge amount for the country to
go after. Importantly, if you have the cheapep it's most reliable,
(23:01):
most emissions responsible power capability, then all of a sudden,
things like, well, is that where I should put my
data center? As global companies think about, I'll have a
data center in my home jurisdiction. I need to have
a redundant data capability seeing in a safe first world
other jurisdiction, where can I go Look at Australia. Look
(23:22):
at how cheap, reliable and consistent and emissions responsible its
generation is. All of a sudden we become a destination
for many and we saw a little bit of that,
I think in the context of Amazon and the work
that the Prime Minister did there. So we've got to
turn this transition from woe mee, we have to transition
to it is an exceptional opportunity for this country to
(23:44):
differentiate itself and move forward and not become and not
be just a commodities lucky country, but a self determined
lucky country.
Speaker 1 (23:54):
So should that the government go harder, should it set
more aggressive targets for emissions abatement?
Speaker 2 (24:03):
I think that's something that is potentially available. But I
think why don't we go a little easier on ourselves
for the moment, which is, let's get ourselves organized as
we submit, as we saw in the submission on productivity,
what don't we make sure that our process is and
the way we are pursuing that goal, that we're meeting
(24:23):
a certain standard of excellence now. And if we can
deliver on that excellence now, then we've earnt the right
to say, let's have an even bolder or more aggressive
ambition in the future. So I feel like that's potentially
how we might approach it. But why don't we earn
the right to do that by just delivering on what
we've said? And as I say, there's so much within
(24:44):
our reach to help us get after it now that
you know, I would love the country to be more
excited about it as a great opportunity rather than some
great impost or challenge.
Speaker 1 (24:59):
That's the first half of my interview with Westpac's CEO,
Anthony Miller. Anthony was proudly hosted by the Trans Tasman
Business Circle for thirty three years. The circles been the
region's leading stakeholder engagement platform, connecting senior leaders across business,
government and community in Australia, New Zealand and Singapore and beyond.
With over two hundred and fifty high impact engagements annually,
(25:19):
the Circle shaped strategic conversation strengthens public private collaboration and
deepens cross border partnerships. Privately owned and proudly independent, the
Circle is powered by a team of senior professionals dedicated
to delivering meaningful, high trust experiences. Join me again next
week for the second half of this interview, including Anthony
Miller's take from what needs to be done to fix
the housing crisis. Remember to hit follow on the podcast
(25:42):
and subscribe to Fear and Greed's free daily newsletter at
Fearangreed dot com. Today you I'm sure, Aelma, and this
is Fear and Greed one on one
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