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Year 2000 advice

Document date:  Wed 24 Mar 1999
Published:  Wed 24 Mar 1999 00:00:00
Document No:  146776
Document part:  B
Market Flag:  N
Classification: 

HOMEX - Melbourne                                                     

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PROGRAM MANAGEMENT AND CONTROL

ANZ set up a Group 2000 Project to provide ongoing direction,
guidance and management of the issue across the organisation. Year
2000 representatives in countries, subsidiaries and business units

The Group 2000 Project is headed by ANZ's Chief Information Officer,
who reports direct to the Chief Executive Officer. The project is
controlled and overseen by an executive Steering Committee and the
ANZ Board, who receive monthly reports on progress.

ANZ has comprehensive Year 2000 quality management plans that conform
with international standards (ISO 9002). Internal auditors review the
project's progress, and report regularly to management. Audit reports
are also provided quarterly to the Audit, Compliance and Finance
Committee of the Board.

MAINTAINING INTEGRITY OF SYSTEMS

ANZ has established a process to minimise the impact of system
changes and new developments on Year-2000-tested systems, while
balancing the need for business innovation to retain competitiveness.
Year 2000 Compliance Review Boards (CRBs) have been established in
Australia and offshore locations to investigate the potential risks
of such changes.

In December 1998, the CRBs commenced reviewing and approving all
changes to ANZ's production environment.

RISK MANAGEMENT

The Year 2000 issue has not been encountered before and, whilst ANZ
is working hard on this issue with the objective of maintaining
normal banking services, there remain elements of risk regarding
events and supplies; therefore, outcomes cannot be certain.

The organisational dependencies and systems which support today's
financial industry are very complex, with many organisations reliant
on services provided by external parties. ANZ does not have control

Therefore, ANZ's risk management plans include reviewing all Year
2000 internal and external dependencies and establishing appropriate
contingency plans.

ANZ has numerous recovery/continuity plans for different group
companies and market sectors. ANZ is in the process of enhancing
these plans to include specific Year 2000 focus. Problems leading up
to the Year 2000 are being managed as part of the normal business
continuity process.

ANZ is monitoring risks which may remain after all its activities to
address Year 2000 issues have been completed, including risks
relating to infrastructure items such as power and
telecommunications. ANZ is currently not in a position to assess the
likelihood of such risks being material. Efforts are being made to
minimise exposures including those related to countries where
preparedness may be below acceptable standards.

As a special focus for the transition period, ANZ has established a
'Managing the Event' (Situation Management) team to manage any
problems that may occur which cannot be mitigated in advance. ANZ is
building on experiences gained from the introduction of the euro,
also a time-critical global project, for use in Year 2000.

COSTS

The estimate for total capital and operating cost to ANZ for the
period until April 2000 is A$183 million. The amount spent to 28
February 1999 is A$90 million. ANZ anticipates that it will complete
the project within budget.

The cost covers activities associated with preparing for Year 2000,
including internal system repair and testing, vendor management,
contingency planning, communication, risk management and managing the
transition.

INDUSTRY CO-OPERATION

In Australia and New Zealand, Year 2000 interbank working groups have
been formed, and ANZ is an active participant.

ANZ has business operations in 43 countries, and has relationships
with overseas regulators, banks, industry bodies and working groups,
including the Global 2000 Co-ordinating Group. Industry bodies in
several countries have established Year 2000 working groups, similar
to those in Australia and New Zealand, and ANZ is an active
participant in many of these groups.

In Australia and New Zealand, full end-to-end interbank testing and
retesting of payment streams is under way to ensure the integrity of
the payments systems.

The following table outlines the major industry tests planned:

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EXTERNAL TESTING PROGRAM                                    SCHEDULED
                                                      COMPLETION DATE 
----------------------------------------------------------------------
Australian Payments Clearing Association
* Australian Paper Clearing System (Electronic 
  Presentment & Dishonours)                                March 1999
* Bulk Electronic Clearing System (Direct Entry)           March 1999
* Consumer Electronic Clearing System (ATM & EFTPOS)        June 1999
* High Value Clearing System (Real Time Gross Settlement)  March 1999
* Bill Pay                                                   May 1999

New Zealand Payments Clearing Testing                      March 1999

New Zealand Real Time Interchange Switches                 March 1999

New Zealand ATM and EFTPOS (including Visa & MasterCard)    June 1999

Australian Stock Exchange - street-wide test
* Non-participant broker (custodian)                       April 1999
* CHESS Banker - payment provider                          April 1999

Australian Interbank Working Group
* Telstra Model Exchange ANZ-NAB                            June 1999

Global 2000 Co-ordinating Group
* Global Payments Test                                      June 1999

US Federal Reserve of New York                              July 1999

Central Bank of Oman                                     January 1999

Bank of Japan                                           December 1998

Other external interfaces:                                  June 1999
* SWIFT, Reserve Bank of Australia, Cedel, Visa 
  (Australia), MasterCard (Australia)

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