Through our annual materiality assessment we engage with internal and external stakeholders to inform our identi cation of social and environmental risks and opportunities. We seek to identify those that have the most potential to impact our ability to operate successfully and create value for our stakeholders.
These issues may change over time, re ecting changes in our business and external operating environment and the expectations of stakeholders. We use the results of the assessment to inform our business strategy thinking and our Sustainability Framework, reporting and targets.
This year, stakeholders ranked the following issues (risks or opportunities) as having the most potential to impact our value creation in the short, medium and long-term:
Fairness and ethical conduct: is the highest ranked issue, with the Royal Commission strongly in uencing stakeholder sentiment in Australia. Operating in a fair and ethical manner is seen by stakeholders as fundamental if we are to demonstrate we are trustworthy. Stakeholders commented on the speci c issues of nancial incentives resulting in poor customer outcomes, products with poor value for customers and conduct issues.
Corporate governance: it is well recognised that organisations with strong corporate governance processes and policies in place are likely to perform better in the longer term. This year stakeholders told us that ANZ needs to identify and act on misconduct and failures to meet community standards and expectations quickly, and improve remediation. This is the rst time this issue has been ranked in the top ve, re ecting stakeholder concerns following the signi cant failures highlighted at the Royal Commission.
Fraud and data security: could signi cantly disrupt the bank’s operations and impact our reputation in the event of a breach. Ensuring we have strong internal controls and risk management frameworks in place to mitigate this is critical. Ongoing education of our customers and the wider community about online risks and improving their own data security is also considered important.
Customer experience: delivering a positive customer experience is a key way in which ANZ can di erentiate itself from competitors and deliver sustainable business performance in the long term. Stakeholders also highlighted fairness, transparency, accessibility and simplicity of products as critical to demonstrating to customers that they can trust us to provide them with the right products and services for their circumstances.
Digital innovation: is core to ANZ’s strategy and a key factor in driving positive customer experience. Customer expectations are being rede ned by their experiences with companies using technology in new ways to deliver better service. Today, the smartphone is our most popular ‘branch’. It is now more important than ever that we work hard to keep up with digital change and customer expectations to make banking easier for our customers.
The key steps in our 2018 materiality process, as well as the full list of our material issues, is discussed in detail in our 2018 ANZ Sustainability Review available at anz.com/cs in December.