Speech Fireside chat at the Women in Payments Symposium

Adrian, thank you very much indeed. I have an enormous - please another round of applause for Michele as she comes to the stage if you wouldn’t. Have the huge honour of interviewing you - may I give you that and check it’s switched on before we begin.

I was just going to say Adrian has the most phenomenal memory.

I was going to ask you when you hear that sort of recollection of the journey and then also you joining all those years ago, what does that evoke as you listen to that story come to mind?

It actually evokes some very fond memories because we were embarking - Adrian was embarking on his knowledge of payments, so was I. I came into it in 1998 and I didn’t know anything about payments when I came into this. I’d come out of the international department of the Reserve Bank so I knew lots about exchange rates, but nothing about interchange rates. So we were learning together in many ways. But it was a journey that we were the first in the world to actually look in great detail at interchange and as some of you will know we ended up in court over it. That was a challenging experience as well. But when I was listening to Adrian talk I was actually smiling. I was just remembering that even though we were working with the industry and we were making changes they wouldn’t necessarily like, I look - and even some people in this room, we made life-long colleagues out of it. We all sort of just moved on and we got on with the reforms and, you know, I’ve known Adrian ever since then and I think we’ve made some really good professional relationships.

And we’ve been talking a lot today about the importance of the network and the ecosystem and how you compete with respect but also then you collaborate with great intention. I wonder if we could go back to when you sort of came into the world of payments, and can you just shed some light on what were some of the biggest challenges then and what was front of your mind as you were beginning to navigate this weird and wonderful world?

The first thing I’d say is that payments at the time was really - it was the plumbing - it still is the plumbing - but it was completely unacknowledged. People didn’t really talk about it. There was a group of people who were au fait with cheques and direct entry and high value payments. At the time we’d just introduced RTGS. RTGS came in in 1998, and so it was - but it was a group of people who were payments nerds in some sense and maybe we’re all payments nerds, but it was quite under the radar. People didn’t really think about it very much. I actually - I brought this, this isn’t really notes, it’s - in 1998 when I first moved into payments I wrote a Reserve Bank Bulletin article and we had a summary of payments system features in 1998 and I just thought I’d like to read it to you. This isn’t all of them, this is just a few of them. It says, "Cash remains an important payment instrument in the Australian economy." It accounted for, I don’t know, I suspect around about 80 to 90% of transactions. "On average non-cash payments to the payment of 150 billion are undertaken in Australia every day." That’s probably more like well over 300 billion. This one I love, "The cheque is still the most important non-cash payment instrument in Australia, although the volume of cheques has stabilised over recent years." And then to something Adrian said, "Growth in non-cash payments in recent years has been driven mainly by growth in EFTPOS transactions." As he said, that was the bilateral PIN-based system as opposed to signature-based systems in the cards. When I look back and I look back what I wrote back then, and I think about it now, I think mainly the main challenge, I think, at the time was recognising that the payments system was moving on and we had a mandate for efficient and competitive payment systems and how do we as a regulator encourage that while not stifling innovation? I think that was the challenge, and the continuity change reforms which were very, very hard fought and as I said we ended up in court over them, they were a really important part of bringing what we would regard as competition and price signals to the payments systems. So I think that was the biggest challenge we were facing at the time.

Do you mind me asking how you got into this because your background is an economist if I’ve understood correctly. What were you particularly attracted to the world of the plumbing, as you describe it, or did it sort of happen by accident where you said I’d like to take my career and zig-zag and try different things?

It’s actually a little more mundane than that. I was on maternity leave and I was looking for a job to come back to and at the time Adrian referred to the Wallace Inquiry and we created a new department in the Reserve Bank called payments policy department and I had a phone call from the new head of the department, John Veale, who said would you consider coming back as the deputy head of this department and I’d never even considered it. I didn’t know anything about it so he gave me a little bit of reading material and I interviewed for it and I got the job. So it was - but I’d have to say that that has sort of been my philosophy in my career most of my life, which is opportunities present themselves, you come to a fork in the road, you can continue doing what you’re doing or you can try something new, sideways move, and I’ve always thought why not take the sideways move and see how it is. As it turned out it was the best thing I ever did. It was fun, it was educational, it was challenging intellectually, and it really set me up, I think, for the rest of my career.

I think this is a fascinating sort of point to just spend a moment on, actually, which is the whole thing about taking risk in career, because we sort of go through a journey where we go, well, I think I’ve figured out my pathway, I think I know where I’d like to go or not. Taking risks is something that we must all do to advance our careers, but that’s not necessarily a comfortable state of mind. Can you just share - do you have frameworks that you - or do you just jump in with both feet and go it will be what it will be.

No, no, I do have a little bit of a framework. That was the first time I - no, probably it was the second time I’d sort of taken a leap sideways to something that I wasn’t familiar with. The second time was in 2010 when I’d been in payments for 12 years, I was a - you know, I was recognised international expert in payments and Australian expert in payments and the Governor at the time, Glenn Stevens, called me up and he said, "Would you consider moving into bank notes", currency, printing bank notes, those sorts of things. I was quite taken aback and I thought I’ve got all this expertise, I’m a recognised expert, why would I go and do something I know nothing about, and then I thought about it and I mulled over it and I felt that, again, opportunities present themselves, I probably need to take that opportunity and just see how it goes. As it turned out it was a fabulous job. We launched the new generation bank note while I was there and ultimately I ended up also looking after the areas that run the high value payments system, the RTGS system, and the government banking in the bank. So I got this grounding in the business side of the bank that had I not taken that chance I wouldn’t have ever had that.

And as you describe that I sort of think the words that buzz in my mind is that feels very kind of operations almost in terms of it’s literally the production of notes and coins in so many ways. Was it like that? Shine some light.

Yes, it was very business-like and at the time I was also chair of the note-printing factory. I’d never been a director - -

Can you say that one more time? I love that.

I was chair of the board of the note-printing factory, and I knew nothing about note printing obviously and I knew nothing about operations generally. One thing I learnt, actually, which I think was really valuable for my future career as well, was that I didn’t know - when I was in payments I basically could pretty much do anyone’s job in payments. I knew everything and now I knew nothing. All of a sudden I had to figure out who to ask, I had to figure out the sorts of questions I needed to ask to probe properly, I had to figure out who I could trust, who the experts were. So it was a really different modus operandi for me because I couldn’t just say, "I know the answer to that." I felt that that was a really good training for me going forward because I’ve been able to carry that forward in a lot of other things I’ve done.

And we talk a lot about leadership and stakeholder analysis, really understanding who you should talk to, who has influence, who has most interest and it’s fascinating to hear you talk about that. I think that’s got to be my favourite job title ever by the way, but I am really curious because this came up earlier today on this very stage about, you know, we live in fast-changing times and I could linger on that for a long time but I think we all know what we’re talking about in terms of the world of payments, but there’s one topic that still keeps coming up which is cheques and I’d be really keen to hear from you as you look at the world today - we’ve talked about some of the things that have changed - there’s some certain things in play that you say actually haven’t changed and has that surprised you in any way?

Well, I don’t think - well, cheques - I actually don’t think that cheques - well, we know we’re going to close the cheque system, but interestingly back in 1998 people were saying the death of the cheque is exaggerated. You’ll never see the death of the cheque. Just as people - I was reminded, actually, by a colleague just - my Reserve Bank colleagues over there, the table over there, I was reminded that a fellow I worked with once said that payment cards, physical cards, will go before cash does and everyone said no, rubbish. Physical cards do look like they will go before cash does. So I’m not quite answering your question about what hasn’t changed. I guess why I’m bringing these things up is at the time some of the things you think are not going to change and are reasonably intractable, they might be the things that do actually move the quickest, and cheques moved very quickly once it started to move, and I think the thing - this is the intriguing thing about payments is it’s a network and the thing about networks is that you can chug along, but when something gets traction then all of a sudden it takes off. I remember when I think it was Commonwealth Bank was doing a trial of tab and go, I think it was in the shire, just down there, just with some terminals, and it didn’t look like it was going to take off. People just weren’t interested in it, and then, again, it was the network effect. The big supermarkets took it up and once the big supermarkets took it up and there was enough acceptance of tap and go it shot off. So I think this is the fascinating thing about payments for me, that the network effect can mean that something doesn’t seem to move for ages and then all of a sudden it shoots off.

And when we think about the world of payments obviously the wholesale side of things then there’s obviously the retail side, but in the middle of that you’ve got the corporates as well, and I wonder whether in this world we tend to talk about the corporates less, but they have such an important role from what you were suggesting there.

They do have a very important role and government also has a very important role. So the issue of cheques, for example, there’s certain legislation that still has cheque payment in it and some of that is down to government. What people are able to pay their bills with becomes really important, I think, to guiding the sorts of payment instruments that people will use, and once they could pay with cards then that became a very important payment instrument. But I remember going into the post office and paying with a cheque my electricity bill. That was the sort of thing we did.

It’s fascinating to listen to you talk about the dynamics at play and what’s changed, what hasn’t changed. I’m very curious, you are the first female ever Governor. Do you mind if I asked you about your journey to that seat? But you also touched on something already which feels a bit like sponsorship. You had people looking out for you, and this comes up a lot in terms of coaching, mentorship, sponsorship. I’d love to give your thoughts about what advice would you give this room of amazing women about taking senior seats.

Sure. I never had any formal mentoring or sponsorship, but when I look back there was a number of key men - I was always the most senior woman at the bank working my way up, but when I look back, and I did recognise it at the time, there were some men who were informally, in effect, mentoring me and sponsoring me through, and I’m still in contact with them. One or two of them ended up being Governors, John Veale who I spoke about earlier and John Laker who was also mentioned by Adrian. They encouraged me, they gave me delegation to do things that I wanted to do. So the initial work on interchange, I carried that, a lot of that myself. That was given to me by my boss and he said you carry that forward. Keep me engaged but you carry it forward. So my advice, I guess, would be that even if you don’t have a formal mentor, see if you can identify some people that you are comfortable with, that you think will even take on a sort of an informal sort of champion role for you, because they’re out there. You may not realise, but there will be people out there that will do that for you, and I was very fortunate that I had some really great male bosses who really helped me to grow in my leadership journey and also backed myself. It was - sometimes when I’d think oh, you know, maybe I can’t do that, they would give me the encouragement to try.

And it’s always very interesting listening to people, very senior people, talk about - your words exactly, sort of backing yourself in your entire career journey and hearing you talk about the decisions, the steps you’ve taken, those who have drawn you into positions as well and that have been both strategic and operational is really fascinating. As you come to this wonderful community of women in payments, and actually I don’t know whether you’re aware, you opened the session this morning because we had a video because it’s the 10th anniversary and you were interviewed for that.

I remember doing that, yes.

You remember doing the video. You came across very well you’d like to know. I am very, very curious to know as you look at this community that continues to grow, and particularly one thing that struck me today is the deep sense of pride of Australia that comes from every single person in this room, and you’re smiling even as I say that. I think everybody else is feeling it too. Could you share some thoughts about when you travel the world as a very senior woman in payments who is Australian and representing Australia, what that feels like and what particularly makes you proud?

I think Adrian sort of alluded to this. I think Australia does in any ways punch above its weight and people are always interested to learn about - because our journey in payments I mentioned earlier we were the first jurisdiction in the world to do interchange regulation. Many other jurisdictions now have done that as well, but we were the first, and it was a hard slog because we had the might of - and I’m sure there’s Visa and Mastercard sitting here somewhere, but we did have the might of Visa and Mastercard opposing us, but others have done so now. I think when I travel the world, specifically in the payments space, I used to get lots of invitations from people to come and speak about our experience, our analysis, I think we were well-regarded for the way we had approached things in an evidentiary base. So even now while I travel the world I think I do get the feeling that people are interested in Australian perspectives because we’ve done a lot. Our NPP, there were fast payments before ours, but I think we get - always get lots of questions about how we set up the NPP, its capabilities. So people are interested in what’s going on in Australia in payments.

And do you still travel extensively today? Are you still getting invitations, I imagine, to travel the world?

I do travel quite a lot. It’s not - it’s more than I’d like, probably, and it’s not just for payments now, but it’s more - I speak a lot more about the economy. People seem to be more interested in interest rates.

It’s one of these things where you go I wish everybody wasn’t quite so obsessed with interest rates, but it seems to be. I wonder if I could bring it back to your world in this community, and I suppose is there a call to action that you would throw out to this wonderful group of people that says - about the role of the RBA and how you want to interact with the industry and what you really see as being the great potential for engagement.

We actually had a payments system Board meeting today so I’m fresh off all things payments. The thing that came out of it for me was, and I reflect on this through my time in payments, is that what we’ve achieved we couldn’t actually have achieved without the engagement of the industry. So Adrian alluded earlier to the NPP. The genesis of the NPP came out of a thing called the strategic review of payments - of innovation in payments that the bank did, and we identified a number of things. We worked with the industry and the industry took the bit between its teeth and it ran with it, and my experience, apart from the interchange regulation, mostly the way we have achieved payments reform in Australia is by cooperation, by talking to the industry, by presenting the evidence, by convincing the industry to work with us on things, and that’s the sort of environment I would like to continue. We’re not always going to agree, and in fact some of you aren’t necessarily going to agree with one another, but I think we do have a very innovative payments space in Australia and we want to keep it that way, but we also want to make sure that it’s competitive and that it’s a level playing field. So I think if we can bring the industry with us - we don’t want to regulate, we’d rather just develop a consensus and move the industry forward together. That’s our preferred modus operandi.

And that forum of healthy debate, healthy challenge will always drive better outcomes as well. I wonder if I could twist the question back a slightly different way, which is - because we’re always really curious as we think about perhaps future symposia, what we should be talking about. Is there anything you think we might be at risk of overlooking? I know it’s quite a big question, but I’m very curious about what might we be missing?

I can’t - well, if I knew what we were missing I’d probably be leaving the Reserve Bank and setting up a business. I can’t really think of what we’re missing, but I do think that we do need to watch what’s going on overseas and I think we need to - there’s certain things that are going on which - I don’t think we want to be at the forefront of, but I think we need to be prepared to be a fast follower. I’m thinking of things like interlinking of fast payment systems, I’m thinking - I’m not - I don’t see big stable coin things going on, but I think we need to keep an eye on it. I think we need to be - might need to be a fast follower. I guess my feeling is we just need to be outward looking, looking at what’s happening overseas, looking at whether or not there’s anything in Australia which might be impediments to that, and we don’t need to be at the bleeding edge, but we need in many cases, I think, to be prepared to follow fast if we need to.

It’s wonderful to hear you say that because the thing that comes to mind as you say that is, of course - and it’s an obvious thing to say, but I will say it, which is of course Women in Payments is a global organisation, so when we think about the insight and the intelligence that we can gather as a community globally is really important. I wonder if I could ask you for some final thoughts as we close out the discussion. Are there any final pieces of advice that you would give this audience?

I spoke at this symposium back in 2016 and I actually went back and read what I spoke about, and interestingly I wouldn’t change what I said then, I think, and the things that I think - the things I said then were back yourself, so a little bit like - even if you’re nervous, sometimes you’ve just got to back yourself in, and the thing that I’ve learnt is that sometimes others see things in me that I can’t quite see in myself. So taking advice from the people around you and gathering strength from the fact that if they think you can do it you probably can do it. A few other things I would say, I think that the way that you make connections is really important. I think that’s really important in payments. I think even, as I said, if you don’t necessarily agree with one another, having connections and having relationships that you can speak to people, that you can ring people up, that you can have a cup of coffee with in a respectful way, even if you don’t agree, that is so important because payments is a networks business, and yes we need competition and innovation and all those sorts of things, but payments is all about getting things from one bank to another bank or one person to another person. So we do need to continue talking to one another. That would be my other piece of advice, I think. That’s why things like this are fabulous because you’re all from different organisations, you might be competing in the corporate world, but in this sort of environment I think there’s a lot to learn and there’s also a lot to building the relationships so that if you do need to you can pick up the phone and ring someone and say, you know, "I want to talk about this issue. I know you don’t necessarily agree with me, but let’s have a conversation." I think building these sorts of relationships in the payments business is really, really important.

I have to say this has been one of the most joyful conversations because not only have we covered your career journey, your view on payments and where you started, what you reflect on has changed and has not changed, your thoughts about what we might be at risk of overlooking and to look up and to look out, your clear sense of pride of the work that you and your - the RBA have been doing, your connection with the industry, and particularly when you’re out on a global stage as well, but also some of the real insights into your personal career journey and what makes you tick, and particularly thinking about taking risks, backing yourself, build your connections. Ladies and gentlemen, I hope you’ve enjoyed it as much as I have. Please join me in thanking Governor Michele Bullock.

Thank you. All the best to the nominees and have a great awards ceremony. Thank you.

Thank you very much indeed. Thank you.