ANZ’s Complex Remediation Plan and its Associated Costs
The increased complexity and bureaucratic nature of the Root Cause Remediation Plan (RCRP) developed by Australia and New Zealand Banking Group (ANZ) could drive up the costs of managing non-financial risks for the bank. The RCRP is a response to the Court Enforceable Undertaking accepted by the Australian Prudential Regulation Authority (APRA) in April 2025, meant to address ongoing weaknesses in the bank’s non-financial risk management practices and risk culture.
Understanding the Role of Promontory
The Establishment Report, which outlines the details of the RCRP, was prepared by consulting firm Promontory, a unit of IBM. Promontory has a strong background in this field, having previously worked with Commonwealth Bank (following APRA’s 2018 inquiry) and Westpac (following AUSTRAC’s 2019 allegations of anti-money laundering breaches). The firm’s insights into big bank idiosyncrasies and sensitivities are invaluable, although it remains to be seen if the lessons learned from previous engagements can be applied to ANZ’s situation.
Staffing Challenges Amid ANZ’s Remediation Effort
As part of its restructuring efforts, ANZ has so far made at least 1,000 staff redundant, with plans to cut a total of 3,500 positions. Additionally, 1,000 contractors have been let go. However, given the extensive requirements of the Remediation Plan, it’s possible that ANZ may need to rehire or maintain higher staffing levels than initially planned to successfully execute the RCRP.
The Comprehensive Nature of ANZ’s Remediation Plan
The RCRP is comprehensive in its design, addressing the specific issues raised by APRA, the root causes identified through the Groupwide Root Cause Analysis and the Global Markets Business Review, as well as findings from other reviews regarding non-financial risk management and culture. The Plan sets out clear expectations for future operations with defined accountabilities and provides a structured approach to the design, implementation, and ultimate embedment of the deliverables to help ANZ achieve its defined targets. Successful execution of the RCRP is expected to deliver significant organizational transformation.
ANZ’s Commitment to the RCRP
ANZ’s CEO, Nuno Matos, who was appointed in May, has emphasized that he is personally overseeing the non-financial risk (NFR) remediation and uplift. ANZ has also established the People, Accountability, Customers and Trust Program (PACT) to support the execution and provide governance over the RCRP. PACT is working on establishing the necessary frameworks and tools to coordinate and support the delivery of the RCRP, with several actions already underway.
Despite the anticipated challenges and costs, ANZ is committed to tackling its non-financial risk inadequacies head-on, with the hope of achieving a significant organizational transformation in the process. The bank’s remediation efforts are a testament to its commitment to improving its risk management practices and culture, which will ultimately benefit its customers and stakeholders.
For more details about ANZ’s Risk Remediation Plan, you can read more here.
