Managing Director of Ready Media Group, Rob Langton, recently sat down with the current Chairman of the Bank of Queensland, Patrick Allaway, in an exclusive one-on-one interview. We’ve combed through the extensive 48-minute discussion to highlight some of the insightful ideas and stories Allaway had to offer.
Despite interest rate hikes, Australia’s economy is proving resilient
“If you compare the Australian economy to Europe and the US at the moment, we’re in pretty good shape.”
Despite labour chain shortages and inflation, Allaway doesn’t view the financial health of the country in a particularly negative light.
In fact, he’s optimistic about our current trajectory.
“[Australia’s] inflation rate is probably half of what we’re seeing in Europe and the US.”
And given his evaluation of Australia’s unemployment rate and infrastructure sector, Allaway is of the belief that the country has the right qualities to avoid a lot of the pitfalls currently embroiling the economies of some of the major northern hemisphere powers.
“We’ve had really strong growth coming out of COVID. Really good unemployment... [and] we’ve got good investment in infrastructure and construction going on across the economy.”
That doesn’t mean he’s ignoring some of the issues that are causing problems.
“There are concerns. Asset prices are high. We’ve got very high leverage in the economy.”
But ultimately, his assessment is a confident and measured one.
“My sense is that we will show a lot more resilience in trading through this [period].”
The Bank of QLD are investing $500 million to improve their technology
“Like many organisations, there was an investment deficit in technology. The Bank had bought many businesses but never integrated them. So, we’ve been on a program of significant digital transformation”
After Allaway came into his role as Chairman, the Bank of Queensland looked at ways to create more profitable growth. They came to the conclusion that to generate additional revenue, they needed to spend big on optimising their technology.
That involved deactivating the legacy systems that housed the Bank’s data, and transferring that information onto a digital, cloud-based network that could centralise operations.
“That doesn’t happen overnight. We’re two years into that program. It’s a five-year program.”
It’s a long-haul scheme, but given Allaway’s ambition of transforming the organisation into an end-to-end digital bank, time and money is considered necessary expenditure.
“It’s a very bold plan. We’re spending over half a billion dollars, which is about 10 per cent of our market capitalisation.”
The future of the industry is online
The Bank of Queensland’s push to increase their footprint in the digital world is an extension of Allaway’s thoughts on the widespread digitalisation of the consumer experience.
“We’ve had demographics that have never interacted digitally with organisations, that are now totally comfortable doing that.”
Allaway understands that the modern customer demands flexibility from banks. Their clients want the freedom to be able to interact with an organisation in the manner that they see fit.
“Customers want to deal with you on any device, on any app, at any time, 24/7. But they also want to be able to speak to people, and they want the personal touch as well.”
But it’s not just customer service that is being altered by this trend of digitalisation; according to Allaway, currency itself is set to change.
“Cash is gone. We’re going to end up with digital currencies which will be regulated.”
In this, he views the blockchain as an integral part of the way banking is to be conducted.
“There’s no question that [the] blockchain, which is the central ledger, is absolutely the way of the future, and we are going to see digital currencies evolving.”
Ultimately, Allaway is looking ahead, and trying to envision the ways that customers will want services to be offered in a decade’s time. He’s prioritising foresight.
“We’re thinking about; what is this organisation going to look like in 2030, and what are the key initiatives that we need to pursue to ensure that we continue to evolve?”
He has been involved in more companies than you might think
Allaway refuses to pigeonhole himself. He is constantly looking to engage with new businesses, to both learn and advise.
From a member of the Audit Committee at Fairfax Media, to a board member at Dexus Funds Management Ltd, to an advisory board member for Adobe, Allaway has developed a diverse skillset.
When the GFC ravaged his funds management operation Saltbush Capital Markets, Allaway was able to salvage the organisation’s advisory business, and that was what led to a position on the Fairfax board.
“I was advisor to Fairfax during that really disrupted period where they had a lot of debt... it was actually great to be able to come onto the board, knowing the business so well.”
Allaway was able to advise as the company dealt with issues like earnings reductions and diminished market share.
More recently, it was the promise of inventive practice that lured Allaway into an advisory role for Adobe, who he describes as a “fabulous company.”
“It’s a very innovative company to be part of.”
That's the key for Allaway; he’s always trying to find new opportunities to engage with the brightest minds in any industry, be it media, finance, or technology.
His key drivers for success are simple but essential
“Expect the milk to spill. But be resilient.”
Allaway has had companies decline, deals go awry, and predictions fail to materialise, but he stresses that the expectation of hardship allows him to continue to push onwards when the going gets tough.
“You do need to take risks and be bold. But you need to take calculated and thoughtful risks.”
Breaking the status quo is fundamental to his philosophy, and that’s reflected in the sheer diversity of his professional experiences.
“You’ve got to constantly question how you can do things better.”
Watch the full interview, conducted by Ready Media Group's Managing Director, Rob Langton, here.
