Australian bank ANZ spends $20 million on consultants from EY
Over the last financial year, leading up to 30th June 2017, the Australia and New Zealand Banking Group (ANZ) spent nearly $20 million on consultants from EY. The substantial spend was chiefly motivated by challenges resulting from major transformational strategies pursued by the firm throughout the year.
Australia-based banking firm, ANZ, has caught widespread public attention after it came to light that the firm had spent over $20 million on consulting services. The firm drew from a pool of consultants at Big Four consulting firm EY for their services.
ANZ is the fourth largest bank by market capitalisation in Australia, and the largest in New Zealand. In congruence with market trends, the firm began a number of significant structural transformations earlier this year. In March, the firm made a substantial 6% cut to its full-time equivalent (FTE) staff, in addition to selling its Asian retail and wealth business. In the same period, the firm also sold its stake in the Shanghai Rural Commercial Bank, as well as UDC in New Zealand.
The barrage of moves is estimated to cost ANZ up to $1 billion in long-term profits starting 2018. However, the firm appears to be continuing its strategy of transformation. In August, the firm announced a restructuring of its technological division, which involves the segregation of its staff into “tribes” made up of “squads” of around 10 people each, who would handle the daily operations of the firm. The restructuring process is expected to bring about further cuts in head-count in the coming period.
In justification of the large expenditure, ANZ stated that the majority of the funds went into enhancing the firm’s cyber security, a key factor in the overall strategy of transformation. Cyber-security is an area of focus for ANZ, and plans exist for further recruitment to the segment in the future. EY is a particularly strong candidate for cyber-security services in Australia at the moment, having recently acquired the Australian cyber-security firm Open Windows Identity, with the objective of bolstering its presence in the region.
An ANZ spokesperson said that external professionals were preferred for their expertise in dealing with specific issues to meet short-term targets. The cut-backs and restructuring, especially in FTE staff, is consistent with the general market trend, with the National Australia Bank having reduced its FTE staff by 4% during the same period. Nevertheless, with the excessive expenditure on external consulting, ANZ has added fuel to the existing debate in Australia regarding expenditure on the consulting industry, in both private and public sectors. Earlier in the year, the Australian government was criticised for its A$5 billion consulting bill amid a period of tightened state spending.
