The bank is taking significant steps to reform its operations following a $240 million agreement with the corporate regulator. The settlement addresses repeated compliance breaches and market failures. Although ANZ is focused on resetting its future, long-standing issues related to system neglect and poor handling of customers continue to affect business outcomes. The overhaul is about more than damage control, with a clear focus on restoring trust from regulators and the federal government, particularly after missing out on over $100 million a year in bond market fees.
Tensions increased when ANZ was excluded by the Australian Office of Financial Management, the government bond issuer, after a $14 billion trading mistake in the previous year. The error caused taxpayer losses of $26 million and was the result of poorly timed hedging in government bonds, which heavily damaged ANZ’s credibility. At the same time, the bank was also managing long-standing retail banking failures, including underpaid interest, mishandled deceased customer accounts and inadequate support for customers in financial hardship.
The $240 million settlement with the Australian Securities and Investments Commission (ASIC) addressed both retail and institutional shortcomings, though ANZ did not admit liability. Over $115 million of the penalty was linked to consumer banking issues, with some failures dating back to 2013. The bank’s outdated core systems, developed on decades-old software, made it difficult to meet basic customer requirements. Internally, staff were aware of the problems but they remained unresolved, due to divided resources and a lack of attention from leadership.
In an attempt to overcome its system failures, ANZ invested heavily in a digital platform called ANZ Plus. Most of the investment and staffing support was directed at developing this new service while the traditional bank continued to struggle with unresolved legacy issues. Critics argue that this strategy increased customer service problems, drove up costs and duplicated internal efforts. Staff numbers rose from 24,000 in 2016 to more than 42,000 by 2024, a stark contrast to the stable headcount of industry peers.
Despite the promise of modernisation, ANZ Plus has fallen short. It is not yet able to provide new home loans and onboarding existing customers to the platform creates a new client relationship with different account details. This shift has made ANZ operate more like three banks instead of one. The $4.9 billion purchase of Suncorp Bank in 2024 added further staffing and integration challenges, with reports indicating that expected cost and efficiency benefits are behind schedule.
The bank has now begun efforts to restructure and simplify operations. CEO Nuno Matos has announced 4,500 job reductions, reduced the scope of ANZ Plus, and is reportedly planning to withdraw Suncorp Bank’s credit offerings. Although ANZ has denied plans to shut the Suncorp Bank brand, internal sources say discussions are underway around allowing its credit licence to lapse. These moves appear aimed at reversing parts of the previous CEO’s digital strategy, which many now see as unsustainable.
Matos is expected to provide more detail on 9 October about how ANZ will recover both its competitive edge and regulatory standing. Additional measures around executive accountability are anticipated, with the board already suggesting there may be financial penalties for former leaders involved in the failures. For now, ANZ is under pressure to prove that its recovery plan reflects genuine reform rather than superficial change.
