Changes in ANZ’s Asia-Pacific strategy could provide benefits to Papua New Guinea, says ANZ’s Managing Director in PNG, Mark Baker. He also tells Business Advantage PNG he sees growth potential from PNG’s rising middle class, but admits mobile banking isn’t growing as fast as he would like.

The ANZ’s Mark Baker

Following the retirement of ANZ Group Chief Executive Mike Smith at the end of 2015, the Australian bank has refined its long-term Asian strategy. While the bank won’t be pulling out of Asia, there have been changes to the way its international operations are run.

One such change has been to take the bank’s Papua New Guinea business out of its Pacific division and move it into its Institutional Banking division, based in Australia.

‘That decision was made because we are a significant  business within ANZ but, like any business in PNG, we needed to better support our people, process and systems if we are to develop our business,’ explains Mark Baker, Managing Director of ANZ in PNG.

‘The view was taken that this support could be better provided from within the Institutional bank, specifically Australia, rather than our existing reporting line into the Pacific and, ultimately, Asia.

‘Already I’m seeing more and more of my colleagues from Australia getting on a plane and coming up here’

‘Part of it is geography, part of it is history and part of it is just the deep partnerships that exist between Australia and PNG.’

That can only be a good thing for an organisation like ANZ in PNG, Baker tells Business Advantage PNG.

‘Already I’m seeing more and more of my colleagues from Australia getting on a plane and coming up here to support us and our customers. It’s quite different to the logistics of having a staff member from our Hong Kong or Singapore offices come to PNG.

‘And, more and more we want this business and service  here to look like our home market—and our home market is Australia.

‘It’s all about raising the game. We know that PNG has got different challenges, but I’m quite excited by the fact that I can now get that direct support right from the home market.’

Growing middle class

While the bulk of ANZ’s business in PNG is corporate, the bank is also also  focused on the country’s growing middle class.

It has offered a credit card in PNG for several years, but Baker says the recent launch of a Visa debit card is designed to meet a need in PNG’s growing middle-class.

‘Papua New Guineans want to travel, and they want to be able to fund themselves in the way that most travellers do, which is to securely debit their home account,’ he says.

‘You are seeing some growth in mortgages as, basically, more land is released and titles registered. We’re always open to people approaching us on this.’

Baker says the new card is EMV chipped, adding an extra layer of security to existing PIN-enabled cards. Whilst ATM and EFTPOS machines in PNG are not yet EMV supported, when people travel and use their cards overseas it gives them that extra security.

It reflects the development of a more mature consumer market, says Baker. The emergence of more restaurants and entertainment options in Port Moresby, he says, is another indicator of the growth.

Baker also sees developments in the mortgage market as a sign of a burgeoning middle class.

‘You are seeing some growth in mortgages as, basically, more land is released and titles registered. We’re always open to people approaching us on this.’

Financial inclusion

Baker is full of praise for the Bank of Papua New Guinea’s work over a number of years in driving initiatives to enable people who live in remote areas to open bank accounts. The first stage, he says, is for people to have the ability to open an account. They then need to get used to transacting and the benefits that that brings.

‘Clearly a really broad branch distribution network across the whole country is not our core strength in PNG.’

‘How do you have an effective distribution network to get financial inclusion and financial products to people that need it?’

ANZ has 15 fifteen branches in PNG currently.

‘Clearly, a really broad branch distribution network across the whole country is not our core strength in PNG; that core  strength is the technology around banking and the transaction systems and processes that support it.’

Internet and mobile

While this technology is undoubtedly the answer to reaching remote customers, Baker acknowledges that the growth of PC-based internet banking in PNG remains static, in part because of  internet costs, and limited coverage.

‘You can open up a bank account in real time in the most remote parts of the country.’

‘People are going straight to mobile. If you look at somewhere like Australia, internet banking was a big proposition for a period of time, but many people have moved past that and gone straight to mobile. It’s all on the phone now, and ANZ’s launch of Apple Pay in Australia is a good example of that.’

There are some unique challenges in PNG, says Baker, such as literacy levels and geographical remoteness, particularly in the populous Highlands. He says this is why ANZ’s mobile wallet is developing slower than he would like.

‘It’s actually a very good and robust product. You can open up a bank account in real time in the most remote parts of the country. It does everything that people need in terms of transferring funds and transacting. But it’s actually, I think, how you deal with distribution and education  that requires more attention.’