On a probable lack of trans-Tasman banking conspiracy

I just felt a Twitter thread coming on, but I always get annoyed when I’m deep into writing something and notice a typo seven tweets back, so here’s a quick post instead.

Background: I worked for National Australia Bank (NAB), 2009-2013, and then for BNZ for a year or so. Before I became a real BNZer, I spent a few months working for NAB from BNZ’s Queen Street office in Auckland. I surprised myself by enjoying most of that time. Every job I worked at either bank was in the digital teams, mainly working on web content, so I wasn’t exactly in the thick of regulatory compliance or pricing things or directly selling things to customers.

NAB at the time was being dragged by CEO Cameron Clyne along what he hoped would a pretty major cultural change. Before my time we’d had a major scandal (something to do with currency trading – here’s the first summarising news article that Google spat out at me) so there were bloody good reasons to clean up the place in general. Cameron was all about being fair. I remember we stopped charging a lot of different fees, started phasing out commission-based financial advice, and had a long run of (slightly) undercutting the other big banks’ mortgage rates. On the workplace side there were staff volunteering days, programmes to increase inclusion in various ways (most of which are common in corporations today – think of visible and measured efforts to raise up women, LGBTIQ, and indigenous employees), and a big push for openness. This got very literal: Our new HQ buildings in Docklands were open plan – even for executives – with glass-walled meeting rooms.

We knew the Big Four banks’ collective reputation. We had a massive Break-up themed marketing campaign which was all about us “dumping” the other three. It was bold, especially in the way that it only really made sense if you believed that we’d all been colluding with each other up until that point.

So, the one of the Australia’s Big Four banks that I saw from the inside was possibly a few years ahead of the others when it comes to the “misbehave -> get caught -> do something about it” curve. Cameron was our “new broom”, and I reckon that he sincerely believed that his reign at NAB was going to convince the industry to follow suit and stop being bastards before the government upped the regulatory pressure.

If that was indeed his idea, it failed. Now there’s a big bad Royal Commission going on in Australia, and people talking about whether NZ should have something similar. Since every big Aussie bank owns a big NZ bank, and since the parent banks all seem to be guilty of all sorts of misconduct, they’re probably running their kiwi offshoots in similarly shady ways. Right?

I can see the apparent logic, but I’m not convinced.

The sorts of things that have come out in the Aussie Royal Commission are about pricing (fees, interest rates etc.), employee bonuses and bribes, and processes like customer credit checks. As far as I know, NAB and BNZ would set those things very independently of each other. As far as I know, the other banks are similarly divided.

Some of the things that keep parent/child banks surprisingly separate from each other are:

Regulations: The two countries operate under different regulatory frameworks, so banks build their own ways of doing things. Even if one blindly copied a process from the other, the very next step would be for the copying bank to modify that process. It’s not exactly a genetic transfer from one to the other.

National culture: In general, Aussies put up with more shit from their banks than New Zealanders do. One example: In 2010, maybe even 2011, the only way to reset your card PIN with NAB was to have them post you a new one to your actual letterbox. At least 15 years earlier I’d been able to do reset my PIN immediately in the Hamilton branch of the National Bank of New Zealand (remember them? They’re part of ANZ now). The point is, if NZ banks tried to import a lot of the ways their Aussie counterparts operate, their customers would notice, complain, and rebel. In truth, NZ “child” banks are proud of being better and more efficient than their parents, and don’t see any reason to look for advice from Sydney or Melbourne.

Political culture: Australia sees banking as much more of a political thing than New Zealand. Every time anyone raised mortgage interest rates, the Treasurer (equivalent of NZ’s Finance Minister) would be on the news that night, angrily berating them for it. The sorts of things to which executives need to be attuned, therefore, are different.

Systems: In my day, banks were still running on old, old, old software. I’d be stunned if that wasn’t still largely true. And I mean pre-Windows old. There are no off-the-shelf upgrades, no easy ways to connect new systems in or out of what’s already there, no APIs, nothing in the architecture to really acknowledge that the internet is even a thing. Old banking systems don’t play nicely with anything else. But they’ve been going for decades and they do what they do very well without fucking up. When your systems count and track almost all the money that makes up your nation’s economy, that’s a pretty important thing. But when one bank buys another, you don’t even consider trying to integrate systems. You keep them separate. Anything built into the way Bank A runs is not built into Bank B.

At NAB and BNZ this separate systems thinking carried though even to current software that could realistically have been shared. When NAB changed its web CMS (i.e. the system that underpins its website, but not internet banking), I don’t think BNZ was even seriously offered the chance to share the cost and join in the upgrade. To this day each brand is paying for and running its own thing.

So, those in-house messaging systems that shady bankers use to collude, or those pricing flags that people are quietly ignoring, or those interest rates that are being manually overwritten are probably all within a single country’s borders.

Structure: Even viewed as an organisational chart, BNZ was not a smaller NAB. The way products were managed or decisions were made was different in each place. In each place the main digital assets were internet banking, apps, and a website, but even then each digital team was a completely different shape. BNZ had totally “gone agile” (that’s nerd-speak for a newish way of managing projects and the work within them) throughout their entire digital team of 100+ people before NAB had finished a single agile project. As far as I know, the only reason news of BNZ’s 18-month transformation made it back to their NAB counterparts was because I visited the Wellington office while I was home for a conference.

Lack of trans-Tasman collaboration (let alone collusion): For all these reasons and more, workers in parent/child banks don’t know each other. The only counterpart-connections that I knew of were informal ones sparked by a few people who, like me, happened to have worked on both sides of the ditch. (“Oh hey, you work on digital user experience – would you like the phone number of the person who solves really similar problems for customers across the Tasman?”)

Even in the digital world where sharing lessons between different workplaces is far from taboo (and we have the meetups, Slack channels, Facebook groups and conference circuits to prove it), it was never a natural thing to make ANZAC friends. This was so ingrained that I don’t know why this is the way things were.

Another story about the same sort of thing: I played a very small role in NAB’s preparation for FATCA, which is an American law that basically snares every bank in the world in its net (this is a trick you can play when you’re in charge of the default currency of planet Earth). Even here, when NAB and BNZ were under the exact same regulatory pressure to implement processes and systems that guaranteed the exact same outcomes for the exact same reasons, I didn’t see anything to suggest that they were working together. I might be wrong here –  like I say, I was a very small part of a very big piece of work – but it’s not like the organisational culture was to say “oh, hey, you know those banks in NZ and the UK and USA that we own? Let’s help them out, or at least ask how they’re solving these problems.”

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So a shady banker with a dirty secret to share wouldn’t have a buddy across the Tasman they’d want to help out in the same way they might want to help out their mate two cubicles over. Managers with “novel” ways of earning bonuses wouldn’t necessarily have trans-Tasman counterparts with the same incentive structure. Rules that bend in one country might not flex the same way in another. Mistreatment that only elicits shrugs from beaten-down customers in one place would be more of a scandal in another.

I’m not saying that every NZ bank is definitely clean. I’m not saying that an NZ version of the Aussie Royal Commission would find nothing. But I am saying that there are very few cultural, systematic, personal or procedural ways in which Australian malpractice could have found its way into NZ. If bankers here are being dicks, they’ll be doing it in a homegrown fashion.