Turning a negative into a positive is key to Sheng Lee’s vision for the future of Vanuatu’s biggest bank. Although Mr Lee has held the top job in an acting capacity since October, it was only just over a month ago when he was formally appointed country manager for Vanuatu, Kiribati and New Caledonia.

Born in Singapore and raised on Australia’s Gold Coast, Sheng considers Vanuatu a home away from home now, having lived and worked here for nearly six years.

ANZ’s top dog was originally hired by what was then WestPac. Amusingly, BSP recently announced former ANZ employee Nik Regenvanu as their country manager. Clearly, turnabout is fair play in Vanuatu’s banks.

The Daily Post interviewed Sheng Lee recently.

Managing affairs in a fairly small market does require unique skills, says Lee. “You have all the frameworks that you would be familiar with... but there are nuances to operating in this sort of a jurisdiction, and it’s difficult for a lot of foreigners.... If you hold the view that ‘In New Zealand I did it this way’, or in ‘Australia I did it this way’... I think you’re going to find it very challenging.”

So how to find a path? “You just need to listen and understand how to work within this nuanced environment. I think that’s the key. If you don’t assimilate—not just with people, but with how things work.

“On the flip side, once you do recognise the Pacific Way, then it sort of paves the way.

“There is always a way to get from A to B. Whilst it might seem to be harder here sometimes, because it’s more manual—there are more departments that might get involved—you ultimately get there.”

ANZ relies on its global network to help span the gap between international investors and local realities. “The ability to leverage the network is powerful,” he says.

“[Investors] may not have a relationship here, however they may have a relationship with a branch in China, in Hong Kong or in Singapore. For us, we can’t underestimate the importance of the relationship through our network.

“We are the only AA rated bank in the market. Not to take anything away from our competitors, by the way. But I guess it creates a feeling of safety if you’re an investor…. At times you see a flight to safety almost.”

Does size matter in this market?

“I think there is some merit to that comment, but I don’t think that size will get you the upper hand if you’re tendering for a contract or starting a business. Will it help? Yeah, certainly.”

But there’s much more to the picture: “What people fail to realise is that those large contractors will probably sub-contract to a myriad of other suppliers.... That’s not because they’ve got a big organisation. it’s because they’ve got the skills, they’ve got the ability, the people, the contacts, the know-how to actually fulfill that requirement.

“In turn, they become successful for it.”

To Sheng, the secret to becoming big is caring for the smaller customers and helping them on their way up. But that means making sober decisions about lending.

Growth, he says is “not just about market share. We want to do it sustainably. we want to do it in a way where risks are in line with adequate returns.”

Liquidity is an issue, he says, but there’s a real danger in lending too aggressively. “In the past I’ve seen cycles of this occurring. Banks may not have had to foresight to think, ‘hang on, I can keep growing everything, and be a larger bank than what I am now, but if you’re not growing sensibly, you can end up with a larger problem down the track.’”

He adds, “In a perfect world, I would love to lend more and more... and I’m ready to do that. I guess the complexity to it is that you can’t just hand out loans, right?”

One of the bank’s key challenges, is coping with what is still a very cash-intensive economy. ANZ is taking steps to wean the market from its reliance on paper money, with mixed results so far.

But ANZ is betting big. Where others are taking a brick and mortar growth strategy, ANZ is leveraging technology.

Transactive is their new platform for business banking services. The service allows businesses to conduct most of their B2B transactions online. The bank’s website says it is “Designed specifically for commercial, corporate and institutional clients, ANZ Transactive delivers a streamlined solution for your day-to-day banking needs.”

“With this platform,” says Sheng Lee, “a business owner could be residing anywhere... it doesn’t matter. As long as you have access to our online systems, you can log on and manage those transactions.”

He says it ‘massively’ improves efficiency.

Importantly, it also features more secure two-factor authentication, meaning that you must possess a security device in order to access the service. Two-factor authentication was identified by ANZ customers as a must-have security factor in the wake of a number of customer account breaches, some of which resulted in criminal charges being laid.

Earlier this week, ANZ staff demonstrated another addition to the company’s digital offering. The ANZ Android app is provides personal banking services to people via their mobile phone. It offers pretty much every convenience to customers, with the exception of deposits and withdrawals.

The app requires a separate PIN to log into, so if your phone is lost or stolen, you’re not completely at risk.

The app requires either a Wi-Fi or 3/4G a data connection.

Moving online also helps improve the audit trail, which is increasingly important in Vanuatu. As the nation’s financial reporting requirements become more stringent, banks and other financial operations are finding it more and more important to be able to track every transaction fully.

“Customers are saying, ‘why are you making it so difficult for me to bank? Why are you asking me all these questions?’ It took a period of time for us to communicate and to explain, and for customers to accept, that this is an ANZ requirement.

“We’re very clear, and we’re very strict in certain criteria. We don’t take any chances. So if there’s any doubt or any concern... we will refrain from supporting the transaction.

“The implications are too great for anyone to take any chances.”

ANZ maintains a team of five full-time staff devoted to operational risk management, and is overseen by others in Manila, Suva and Melbourne.

With all of these improvements, Sheng sees a brighter future for ANZ in Vanuatu. He has what he describes as a cautiously optimistic outlook. “We’ve seen a couple of good years if you’re just to look at general GDP stats, but... the largest contributors to that are the infrastructure projects.

“The reliance on infrastructure projects to drive GDP growth is coming to an end.

“That’s not all bad, because we need to go back to where our key skills are. Tourism is one. We see lots of opportunities in the agricultural sector. We also see telecommunications… some development in that space.

“It would be remiss of us to say, ‘everything’s perfect; it’s going to be just great’... but I don’t see things going backwards. I think they’ll slowly build from where they are.

“I think that will probably help us to propel into a stronger economy.”

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