1 00:00:03,760 --> 00:00:06,360 Sean Aylmer: Welcome to the Fear and Greed Daily Interview. I'm Sean 2 00:00:06,360 --> 00:00:08,869 Sean Aylmer: Aylmer. We've talked a lot about the banks in recent 3 00:00:08,869 --> 00:00:12,460 Sean Aylmer: days as they report their half year results. Across the 4 00:00:12,460 --> 00:00:15,780 Sean Aylmer: four major banks, headline cash earnings came in at $ 14. 5 00:00:16,340 --> 00:00:21,130 Sean Aylmer: 4 billion, up about $ 700 million from 12 months earlier. 6 00:00:21,430 --> 00:00:24,290 Sean Aylmer: But the banks are now entering a different environment all 7 00:00:24,290 --> 00:00:26,829 Sean Aylmer: together with interest rates rising last week for the first 8 00:00:26,829 --> 00:00:30,860 Sean Aylmer: time, since 2010. Tim Dring is the Oceania Banking and 9 00:00:30,860 --> 00:00:34,150 Sean Aylmer: Capital Markets leader at EY. Tim, welcome back to Fear 10 00:00:34,150 --> 00:00:34,780 Sean Aylmer: and Greed. 11 00:00:35,150 --> 00:00:36,760 Tim Dring: Great. Thanks for having me on, Sean, great to be here. 12 00:00:37,620 --> 00:00:41,130 Sean Aylmer: So how would you say the banks are doing? Their 13 00:00:41,130 --> 00:00:45,339 Sean Aylmer: half year results, we've had National Australia Bank, ANZ and 14 00:00:45,340 --> 00:00:49,530 Sean Aylmer: Westpac. Three months ago we got Commonwealth Banks. What's the 15 00:00:49,530 --> 00:00:51,280 Sean Aylmer: state of the banking sector do you think? 16 00:00:51,280 --> 00:00:57,040 Tim Dring: Look, I think it's looking pretty strong, Sean. I think 17 00:00:57,040 --> 00:01:00,430 Tim Dring: you highlighted the 14.4 billion in aggregated earnings for the six months. That's about 18 00:01:01,240 --> 00:01:04,300 Tim Dring: 5% up on the corresponding period. So a pretty good 19 00:01:04,300 --> 00:01:08,090 Tim Dring: result from that perspective. But when you think about some 20 00:01:08,090 --> 00:01:10,610 Tim Dring: of the challenges they've been dealing with, as we start 21 00:01:10,610 --> 00:01:15,240 Tim Dring: to live with COVID, we are seeing that ongoing compression 22 00:01:15,240 --> 00:01:19,300 Tim Dring: with margin, and that has plagued the banks for many 23 00:01:19,300 --> 00:01:23,410 Tim Dring: years, to be honest. And we're down to 1. 75% net 24 00:01:23,410 --> 00:01:26,679 Tim Dring: interest margins. That's the difference between what they can lend money 25 00:01:26,680 --> 00:01:30,450 Tim Dring: for and what it costs them to fund those loans. And now 26 00:01:30,450 --> 00:01:33,970 Tim Dring: that was down 14 basis points. So once again, that 27 00:01:33,970 --> 00:01:35,420 Tim Dring: margin has been compressed. 28 00:01:35,800 --> 00:01:37,690 Sean Aylmer: Yeah, the there's a bunch of things here. So let's start with 29 00:01:37,690 --> 00:01:40,100 Sean Aylmer: the net interest margin. That has been going the wrong 30 00:01:40,100 --> 00:01:42,730 Sean Aylmer: way for banks for a long time though. Is this 31 00:01:42,730 --> 00:01:45,170 Sean Aylmer: the opportunity for them to turn it around because rates 32 00:01:45,170 --> 00:01:45,650 Sean Aylmer: are rising? 33 00:01:46,040 --> 00:01:49,000 Tim Dring: Look, it certainly gets harder to manage margin in a 34 00:01:49,000 --> 00:01:53,090 Tim Dring: decreasing rate environment. With the cash rate, being the lowest 35 00:01:53,180 --> 00:01:56,070 Tim Dring: in history, that has been a very big challenge. As 36 00:01:56,070 --> 00:02:00,020 Tim Dring: we've seen that the cycle is starting to change, rates 37 00:02:00,260 --> 00:02:02,960 Tim Dring: will be on the move up. That should make it 38 00:02:02,960 --> 00:02:06,090 Tim Dring: a little bit easier to get some margin expansion. There's 39 00:02:06,090 --> 00:02:08,900 Tim Dring: probably a couple of things in there, Sean, worth unpacking. 40 00:02:08,900 --> 00:02:13,570 Tim Dring: So we saw through the crisis, a number of borrowers 41 00:02:13,760 --> 00:02:19,700 Tim Dring: switching banks, refinancing, et cetera. Competition has been intense. So 42 00:02:19,700 --> 00:02:22,609 Tim Dring: that has put pressure on margins. And as I said, 43 00:02:22,770 --> 00:02:25,840 Tim Dring: as rates start to move up, you'd like to think 44 00:02:25,840 --> 00:02:28,510 Tim Dring: there's some expansion, but I think competition is going to 45 00:02:28,510 --> 00:02:30,970 Tim Dring: be with us for a while. And that is something 46 00:02:30,970 --> 00:02:33,240 Tim Dring: the banks really need to tackle and think about how 47 00:02:33,240 --> 00:02:34,610 Tim Dring: they can deal with that more effectively. 48 00:02:34,930 --> 00:02:39,790 Sean Aylmer: So just on that, are mortgages the most profitable part of banking? 49 00:02:40,300 --> 00:02:44,020 Tim Dring: Look, they are, the banks at scale, like the big 50 00:02:44,020 --> 00:02:46,800 Tim Dring: four banks, they are profitable probably for a couple of 51 00:02:46,800 --> 00:02:52,609 Tim Dring: reasons. One is the amount of capital required for mortgages, 52 00:02:52,820 --> 00:02:56,100 Tim Dring: and obviously for the bigger banks, that's driven by their 53 00:02:56,100 --> 00:03:00,440 Tim Dring: models as they're advanced accredited banks, as opposed to the 54 00:03:00,620 --> 00:03:04,810 Tim Dring: standardized for a number of the other banks supervised by 55 00:03:04,870 --> 00:03:08,359 Tim Dring: APRA. So therefore the amount of capital they need to hold against 56 00:03:08,360 --> 00:03:11,350 Tim Dring: a mortgage is typically a lot lower than what it 57 00:03:11,400 --> 00:03:14,470 Tim Dring: would be for other lines of business they're in, whether it 58 00:03:14,470 --> 00:03:17,710 Tim Dring: be in business banking or in institutional banking. So from that 59 00:03:17,710 --> 00:03:22,350 Tim Dring: perspective, there's a capital advantage in writing more mortgages. So 60 00:03:22,610 --> 00:03:25,769 Tim Dring: they are profitable. The more loans they write, the more 61 00:03:25,770 --> 00:03:27,950 Tim Dring: profitable the banks are. And I think that is one 62 00:03:27,950 --> 00:03:30,959 Tim Dring: thing they have focused on whilst margins have been compressed, 63 00:03:31,400 --> 00:03:34,169 Tim Dring: sort of that price volume equation. How do we get 64 00:03:34,169 --> 00:03:38,090 Tim Dring: more volume through the door? And we have seen growth 65 00:03:38,090 --> 00:03:40,510 Tim Dring: start to pick up a little bit through the last 66 00:03:40,510 --> 00:03:44,170 Tim Dring: six months. Some of the institutions were running at system, 67 00:03:44,170 --> 00:03:47,440 Tim Dring: or just below system, but we are seeing some reasonable 68 00:03:47,440 --> 00:03:51,360 Tim Dring: credit growth starting to come through. So that's helped sort 69 00:03:51,360 --> 00:03:53,820 Tim Dring: of combat and mitigate some of that margin decline. 70 00:03:54,200 --> 00:03:56,500 Sean Aylmer: Okay. So we've gotten into the weeds a little bit 71 00:03:56,500 --> 00:03:58,910 Sean Aylmer: already. I just want to take a step back now. 72 00:03:59,100 --> 00:04:01,680 Sean Aylmer: If you're comparing the banks in terms of return on 73 00:04:01,680 --> 00:04:06,010 Sean Aylmer: equity as a very broad based measure of how they're doing, 74 00:04:06,400 --> 00:04:09,420 Sean Aylmer: where are they at today as opposed to a couple 75 00:04:09,420 --> 00:04:10,060 Sean Aylmer: of years ago? 76 00:04:10,060 --> 00:04:14,260 Tim Dring: Yeah. Look, the return on equity is a key measure 77 00:04:14,260 --> 00:04:19,000 Tim Dring: in looking at bank performance. And we have seen through 78 00:04:19,089 --> 00:04:21,869 Tim Dring: COVID where that has taken a bit of a hit. 79 00:04:21,930 --> 00:04:23,890 Tim Dring: And a lot of that was due to the buildup 80 00:04:23,890 --> 00:04:28,000 Tim Dring: of provisions that the banks had established. It's probably started 81 00:04:28,000 --> 00:04:30,789 Tim Dring: to settle down now and it's in that low sort 82 00:04:30,790 --> 00:04:33,910 Tim Dring: of 10 to 11 mark, but it's well down from 83 00:04:33,910 --> 00:04:38,849 Tim Dring: the highs, when the banks were very profitable and the 84 00:04:38,850 --> 00:04:45,120 Tim Dring: highs, 14, 15% ROEs were achievable. Now, against the global 85 00:04:45,120 --> 00:04:48,900 Tim Dring: standard of ROE, our banks still compare pretty well, but 86 00:04:48,900 --> 00:04:51,900 Tim Dring: they're far from the highs they have been historically. 87 00:04:52,420 --> 00:04:54,750 Sean Aylmer: Okay. So a couple of things in that. The credit 88 00:04:54,750 --> 00:04:59,409 Sean Aylmer: impairment charges, it seems that the banks are more confident 89 00:04:59,839 --> 00:05:02,839 Sean Aylmer: about not having as many bad loans going forward, because 90 00:05:02,839 --> 00:05:05,810 Sean Aylmer: that has helped their results this time round, but with 91 00:05:05,810 --> 00:05:08,320 Sean Aylmer: rising interest rates, isn't that a risk? 92 00:05:09,020 --> 00:05:11,610 Tim Dring: Very much so. I think they have seen their books 93 00:05:11,610 --> 00:05:15,010 Tim Dring: hold up very well, unbelievably well, if you like through 94 00:05:15,620 --> 00:05:18,500 Tim Dring: COVID and we are starting to see a number of 95 00:05:18,500 --> 00:05:21,049 Tim Dring: the banks of wind back some of those provisions that 96 00:05:21,050 --> 00:05:24,540 Tim Dring: were built up. In aggregate, we did see almost a 97 00:05:24,570 --> 00:05:27,529 Tim Dring: 200 mill net gain, net write back, if you like, 98 00:05:28,080 --> 00:05:31,910 Tim Dring: provisions for the last six months, but there are some 99 00:05:31,910 --> 00:05:34,800 Tim Dring: headwinds. And I think some of those factors, they are 100 00:05:34,810 --> 00:05:38,330 Tim Dring: looking to take into account and have been modeled even 101 00:05:38,330 --> 00:05:41,130 Tim Dring: in the last six months through the provision been struck 102 00:05:41,130 --> 00:05:44,120 Tim Dring: in the last half. Because they are looking at some 103 00:05:44,120 --> 00:05:48,410 Tim Dring: of the downside risk factors, those broader economic overlays that 104 00:05:48,410 --> 00:05:52,330 Tim Dring: the banks put in their provisions to effectively provide for 105 00:05:52,330 --> 00:05:55,140 Tim Dring: things that they just don't know about yet. Some uncertainty that 106 00:05:55,180 --> 00:05:58,490 Tim Dring: will occur, and you touched on rising interest rates, that 107 00:05:58,490 --> 00:06:03,150 Tim Dring: has been factored into their economic adjustments and overlays. What 108 00:06:03,150 --> 00:06:08,099 Tim Dring: that does to asset values, collateral values and the economy 109 00:06:08,100 --> 00:06:09,900 Tim Dring: as a whole, does it reach a point where things 110 00:06:09,900 --> 00:06:13,339 Tim Dring: start to slow down? We've got rising inflation and rising 111 00:06:13,339 --> 00:06:16,080 Tim Dring: interest rates and what does that do for mortgage stress 112 00:06:16,080 --> 00:06:19,000 Tim Dring: or asset stress? So I think they are starting to factor some of those 113 00:06:19,620 --> 00:06:23,860 Tim Dring: in, but early days on that cycle. So, it will interesting 114 00:06:23,860 --> 00:06:25,950 Tim Dring: to see that plays out over the next six months 115 00:06:25,950 --> 00:06:26,440 Tim Dring: and beyond. 116 00:06:26,980 --> 00:06:28,789 Sean Aylmer: Stay with me, Tim, we'll be back in a minute. 117 00:06:34,490 --> 00:06:37,909 Sean Aylmer: My guest today is Tim Dring, the Oceania Banking and 118 00:06:37,910 --> 00:06:42,779 Sean Aylmer: Capital Markets leader at EY. Costs are another big area 119 00:06:42,779 --> 00:06:45,510 Sean Aylmer: for banks and ahead of the pandemic, it seemed to 120 00:06:45,510 --> 00:06:47,609 Sean Aylmer: be the way for a bank to be successful was 121 00:06:47,610 --> 00:06:50,120 Sean Aylmer: to cut costs. The pandemic hit. But now we're back 122 00:06:50,120 --> 00:06:52,580 Sean Aylmer: to let's cut costs. If we look back over the 123 00:06:52,580 --> 00:06:56,580 Sean Aylmer: last week, Westpac is the standout in terms of at 124 00:06:56,580 --> 00:06:59,460 Sean Aylmer: least investors view on what they're doing around costs. Having 125 00:06:59,460 --> 00:07:02,070 Sean Aylmer: said that, the benchmark for Westpac was probably a lot 126 00:07:02,070 --> 00:07:04,230 Sean Aylmer: lower than then some of the other banks. It's not 127 00:07:04,230 --> 00:07:05,890 Sean Aylmer: that easy though to cut costs, is it? Because it's 128 00:07:05,890 --> 00:07:09,570 Sean Aylmer: not just about branches and people, it's about legacy systems 129 00:07:10,110 --> 00:07:14,290 Sean Aylmer: and regulatory and positions, post Royal Commission and cyber security, 130 00:07:14,290 --> 00:07:14,680 Sean Aylmer: et cetera? 131 00:07:15,030 --> 00:07:18,970 Tim Dring: Exactly. And running a big bank is a challenge. We 132 00:07:18,970 --> 00:07:21,690 Tim Dring: spoke about the pressure on margins. The other thing they've 133 00:07:21,690 --> 00:07:25,150 Tim Dring: been really trying to do, Sean, is take costs out 134 00:07:25,150 --> 00:07:28,450 Tim Dring: of their business, and they've been able to achieve some 135 00:07:28,450 --> 00:07:31,610 Tim Dring: cost savings in the last six months, cost of income 136 00:07:31,610 --> 00:07:37,520 Tim Dring: ratios had slightly improved, down from 51% to 48.5%. But 137 00:07:37,520 --> 00:07:39,530 Tim Dring: there's a lot of costs that go into that bucket. 138 00:07:39,530 --> 00:07:42,070 Tim Dring: Labor is somewhere between sort of two thirds to three 139 00:07:42,070 --> 00:07:46,340 Tim Dring: quarters of a bank's running costs. The technology spent not only 140 00:07:46,340 --> 00:07:49,920 Tim Dring: in maintaining legacy systems, but frankly keeping up with the 141 00:07:49,920 --> 00:07:51,940 Tim Dring: bank over the road or the bank over the street. 142 00:07:53,020 --> 00:07:54,140 Sean Aylmer: Social media company. 143 00:07:54,490 --> 00:07:58,050 Tim Dring: Yeah. Or the emerging competitor that may pop up. So they 144 00:07:58,050 --> 00:08:01,390 Tim Dring: need to be nimble. But consumer preferences are changing. Things 145 00:08:01,390 --> 00:08:04,810 Tim Dring: are moving more to digital. We've seen them streamlined a 146 00:08:04,810 --> 00:08:08,430 Tim Dring: lot of processes, take out complexity. And when you do 147 00:08:08,430 --> 00:08:11,100 Tim Dring: that, you're well on the way to taking out costs out of your 148 00:08:11,420 --> 00:08:12,140 Tim Dring: business as well. 149 00:08:12,690 --> 00:08:15,450 Sean Aylmer: Okay. Now you're talking, I mean, if we look ahead 150 00:08:15,500 --> 00:08:18,430 Sean Aylmer: here, it's something that I know you are very interested 151 00:08:18,430 --> 00:08:21,980 Sean Aylmer: in, is the whole build to rent concept and you 152 00:08:21,980 --> 00:08:24,040 Sean Aylmer: do believe it's gaining some traction. Is that right? 153 00:08:24,230 --> 00:08:26,840 Tim Dring: Yeah, that's right. I think there is certainly a housing 154 00:08:26,840 --> 00:08:29,810 Tim Dring: shortage across most capital cities at the moment, and we 155 00:08:29,810 --> 00:08:33,189 Tim Dring: are starting to see that put pressure on upward pressure 156 00:08:33,190 --> 00:08:33,429 Tim Dring: on prices. 157 00:08:33,920 --> 00:08:35,189 Sean Aylmer: Just explain bill to rent. 158 00:08:35,700 --> 00:08:39,429 Tim Dring: So build to rent is effectively a scenario where you 159 00:08:39,429 --> 00:08:42,959 Tim Dring: will have investors come in, typically large scale investors. And 160 00:08:43,679 --> 00:08:46,050 Tim Dring: some of the research we've done overseas, whether it be 161 00:08:46,240 --> 00:08:50,020 Tim Dring: superannuation funds, pension funds or managed funds come in and 162 00:08:50,020 --> 00:08:54,679 Tim Dring: buy big parcels of land and build effectively accommodation for 163 00:08:54,679 --> 00:08:58,350 Tim Dring: where the medium density housing and affordable housing. So we 164 00:08:58,350 --> 00:09:00,780 Tim Dring: are seeing that as it is a bit of a 165 00:09:00,780 --> 00:09:03,140 Tim Dring: global trend, perhaps Australia is a bit of a late 166 00:09:03,140 --> 00:09:06,190 Tim Dring: adopter to it, but we see that as something that 167 00:09:06,230 --> 00:09:08,580 Tim Dring: could go to some way to arresting some of the 168 00:09:08,580 --> 00:09:11,550 Tim Dring: housing shortages that do occur in this country and really 169 00:09:11,550 --> 00:09:14,260 Tim Dring: provide a return for some of those investors as well, 170 00:09:14,260 --> 00:09:17,130 Tim Dring: and meet the needs of perhaps some of those home 171 00:09:17,130 --> 00:09:20,179 Tim Dring: buyers that can't get into the market when they are 172 00:09:20,179 --> 00:09:23,290 Tim Dring: looking to acquire either their first property. Particularly the big 173 00:09:23,290 --> 00:09:28,439 Tim Dring: component of any house is the land component and effectively 174 00:09:28,440 --> 00:09:32,540 Tim Dring: using a fund or a developer's balance sheet to effectively 175 00:09:32,540 --> 00:09:35,620 Tim Dring: take that high cost out of it, we think is something 176 00:09:35,620 --> 00:09:37,670 Tim Dring: that has a real possibility in this country. 177 00:09:38,059 --> 00:09:40,739 Sean Aylmer: Okay. But if the super funds are getting into that 178 00:09:40,860 --> 00:09:44,790 Sean Aylmer: area, does that potentially cut the banks out, or will 179 00:09:44,790 --> 00:09:47,250 Sean Aylmer: the banks still be the people lending the money? 180 00:09:47,590 --> 00:09:49,450 Tim Dring: There could be an element of both here. There could 181 00:09:49,450 --> 00:09:51,790 Tim Dring: be some, well, I'll call it equity financing that may 182 00:09:51,790 --> 00:09:55,790 Tim Dring: come through some of the super funds, or other investors, 183 00:09:55,860 --> 00:09:58,270 Tim Dring: but banks can play a critical role in providing some 184 00:09:58,270 --> 00:10:00,940 Tim Dring: of that funding as well. Just finding the right funding 185 00:10:00,940 --> 00:10:04,610 Tim Dring: mix. So I think it's both an opportunity for investors, 186 00:10:04,670 --> 00:10:08,359 Tim Dring: and also a big opportunity for financial institutions as well 187 00:10:08,360 --> 00:10:12,630 Tim Dring: to play a role in part of that rebuild, if 188 00:10:12,630 --> 00:10:15,420 Tim Dring: you like, which is a market they may not have 189 00:10:15,420 --> 00:10:18,000 Tim Dring: played in. So it could be all (inaudible) around 190 00:10:18,059 --> 00:10:18,530 Tim Dring: in this one. 191 00:10:19,150 --> 00:10:21,270 Sean Aylmer: The next thing I just want to ask you about is talent. I 192 00:10:21,270 --> 00:10:24,020 Sean Aylmer: mean, who wants to work for a bank nowadays? Well, 193 00:10:24,020 --> 00:10:26,179 Sean Aylmer: that's probably a bit unfair because I think they probably 194 00:10:26,179 --> 00:10:30,970 Sean Aylmer: are great employers, but they've kind of really changed how 195 00:10:31,000 --> 00:10:34,590 Sean Aylmer: they approach employees because they have to. 196 00:10:35,130 --> 00:10:37,429 Tim Dring: Well, that's right. I think we are seeing the demand 197 00:10:37,429 --> 00:10:41,420 Tim Dring: for talent, right across all sectors and right across the 198 00:10:41,420 --> 00:10:44,300 Tim Dring: globe. It's quite an amazing phenomenon. The situation we're in 199 00:10:44,300 --> 00:10:48,300 Tim Dring: with the labor shortages. Banks are changing. The talent they 200 00:10:48,340 --> 00:10:51,780 Tim Dring: require today is very different from the talent they required 201 00:10:51,800 --> 00:10:54,600 Tim Dring: 10 years ago, 20 years ago. We are seeing the 202 00:10:54,600 --> 00:10:59,020 Tim Dring: demand for talent, particularly in IT, programmers and analysts, the 203 00:10:59,020 --> 00:11:02,679 Tim Dring: demand for talent in data, and also the demand for 204 00:11:02,679 --> 00:11:04,970 Tim Dring: talent in risk. And I think that's been a bit 205 00:11:04,970 --> 00:11:08,400 Tim Dring: of an ongoing theme for a while as banks, whether 206 00:11:08,400 --> 00:11:11,760 Tim Dring: it be large or small, rebuild their businesses, particularly around 207 00:11:11,760 --> 00:11:15,380 Tim Dring: managing risk and customer outcomes. So it's a big issue 208 00:11:15,410 --> 00:11:18,679 Tim Dring: for the sector, and if we think about labor as such 209 00:11:18,679 --> 00:11:22,350 Tim Dring: a significant cost to a bank's cost base, there has 210 00:11:22,350 --> 00:11:24,650 Tim Dring: been some upward pressure on that. And probably we will 211 00:11:24,650 --> 00:11:27,860 Tim Dring: see some more upward pressure on salaries and wages in 212 00:11:27,860 --> 00:11:28,940 Tim Dring: the short term, at least. 213 00:11:29,640 --> 00:11:32,070 Sean Aylmer: Just to wrap up, where do you think the Australian 214 00:11:32,070 --> 00:11:36,709 Sean Aylmer: banks sit today? The big four banks vis a vis where they were 10, 20, 215 00:11:36,730 --> 00:11:40,360 Sean Aylmer: 30 years ago, certainly a more competitive marketplace. 216 00:11:40,820 --> 00:11:43,740 Tim Dring: Look, it is definitely a more competitive marketplace. And we're 217 00:11:43,740 --> 00:11:47,370 Tim Dring: seeing that play out in pricing and customers getting better 218 00:11:47,370 --> 00:11:50,710 Tim Dring: outcomes from a financial perspective. I think it's a very 219 00:11:50,710 --> 00:11:53,729 Tim Dring: different marketplace what customers are able to access now from 220 00:11:53,730 --> 00:11:57,809 Tim Dring: a technology standpoint. I think the banks are really starting 221 00:11:57,809 --> 00:12:01,240 Tim Dring: to get much better at actually understanding the data and 222 00:12:01,240 --> 00:12:05,709 Tim Dring: their customer profile. In understanding that customer profile better, being 223 00:12:05,710 --> 00:12:07,770 Tim Dring: able to make sure they are selling and providing the 224 00:12:07,770 --> 00:12:11,640 Tim Dring: right products tailored to those customers. So automation is playing 225 00:12:11,640 --> 00:12:14,530 Tim Dring: a key role in that. The key essence of banking 226 00:12:14,530 --> 00:12:18,650 Tim Dring: is effectively providing credit and making credit decisions. And we're 227 00:12:18,650 --> 00:12:21,450 Tim Dring: seeing technology play a big role in that as well, 228 00:12:21,450 --> 00:12:24,650 Tim Dring: Sean. But having said that the skills of being a banker 229 00:12:24,710 --> 00:12:29,309 Tim Dring: and providing credit, particularly in business banking, institutional banking, some 230 00:12:29,309 --> 00:12:31,569 Tim Dring: of that can be automated, but some of that does 231 00:12:31,570 --> 00:12:36,150 Tim Dring: require significant skill in credit assessment processes. So there's some 232 00:12:36,150 --> 00:12:39,110 Tim Dring: things perhaps haven't changed, but there's probably more that have. 233 00:12:39,320 --> 00:12:42,380 Tim Dring: And going forward, I dare say there'll be more change 234 00:12:42,500 --> 00:12:43,579 Tim Dring: on the horizon as well. 235 00:12:44,120 --> 00:12:45,710 Sean Aylmer: Tim, thank you for talking to Fear and Greed. 236 00:12:46,030 --> 00:12:47,160 Tim Dring: You're welcome. Great to be with you. 237 00:12:47,530 --> 00:12:50,780 Sean Aylmer: That was Tim Dring, the Oceania Banking and Capital Markets 238 00:12:50,780 --> 00:12:53,670 Sean Aylmer: Leader at EY. This is the Fear and Greed Daily 239 00:12:53,670 --> 00:12:56,350 Sean Aylmer: Interview. Join us every morning for the full episode of 240 00:12:56,350 --> 00:12:59,809 Sean Aylmer: Fear and Greed, Australia's most popular business podcast. I'm Sean 241 00:12:59,880 --> 00:13:01,070 Sean Aylmer: Aylmer. Enjoy your day.