Women in Finance: Michelle McPhee, assistant governor (business services), RBA

Michelle McPhee: Absolutely. Well, the area I work in is probably the area that most people here don’t really know all that much about, but I can pretty much guarantee that you would connect with our services almost every single day. I’ve got three areas under the space I work in. The first one is that we provide transactional banking services to the Australian government. So essentially that means we provide the payments for Centrelink, Medicare, child support. We do the banking for Defence, ASIC, ATO. Often, that’s not that popular because that’s collecting tax. So if you receive a payment from the government, often that has been processed by us. We do about 350 million outbound payments a year, and a lot of those payments go to people who really do need that money. So it’s absolutely essential that those payments are made when they need to be made and that we make sure that we’re always on for those people who rely on those payments.

The next area is that we provide the central infrastructure for the payment system. So essentially, we provide a number of systems, which really underpin the settlement of interbank obligations. That all sounds very dry and quite technical, but essentially, if you make a payment to someone, and they bank with one bank and you bank with another, the transaction that actually shifts that obligation from one bank to another goes across our rails. We also provide the central infrastructure for the fast payments. So you can imagine that we’ve got infrastructure that can process payments in less than a second, which always blows my mind. I can never figure out how that quite happens, but I’m told very reliably by our tech people that it does.

Thirdly, we do the design and distribution of banknotes, and that is a really fascinating space and a very specific central banking role. I’m sure you’re all aware there’s been lots of discussion at the moment about the state of cash, and so we’ve been very engaged in trying to make sure that cash is still available for those who need and want to use it. So it’s quite a diverse set of functions, but as you can see, they’re things that you would all connect with every day, but you might not know that we do them.

Q: What does a typical day or week look like for you?

Michelle McPhee: Interestingly enough, we start every day with a meeting where the policy staff collect all the things that have happened overnight. It might be overseas central bank monetary policy decisions. It might be data that came out in Australia, anything that really impacts the economic landscape. They collect all that, and they report to – they brief the governors every morning. We call that meeting the 8:50 meeting because, funnily enough, it’s at 8:50. So we all come to that meeting, and we get a good briefing. It’s a really good opportunity for all to just kind of get together, set up the day with new information. We often have a good chat about what that information might mean to the way people think about policy stance, and then we get on with the rest of our day.

So, for me, that probably means that I’ll start with team meetings. It might be one-on-ones with my heads. It might be with some of the broader team... I have over 300 people in my team, so I really want to get to know what they like about their jobs, what they’d like to change, what their pain points are, and how we might help them address those.

And then as you may be aware, the bank’s going through an enormous change agenda, and so all of that change needs to be managed well. We have an enormous amount of different committees, mainly steering committees, some of which I chair, some of which I sit on, to really guide that work and those investments, which could be uplifting capability. It could be evolving our payments capability. It could be helping implement some of the recommendations of the RBA review. And then there’s all the roles that we do with my peers to help the governor run the bank. There’s risk management responsibilities. There’s investment portfolios. There’s just the usual executive-type work that we do to run a big organisation that has a complex role in the economy.

I also have some teams in Canberra. Our client servicing team for our government agency customers is in Canberra, so I might pop down there. We actually do our banknote printing and our R&D on banknotes in Craigieburn in Victoria, so I might have to pop down there. I guess, in addition to all of that, I also am the executive sponsor for the Gender Equity (ERG), so I have some responsibilities there. I have a few staff that I mentor, and so I might meet regularly with them for coffee to see what’s going on in their world.

Q: Can you share a little bit about your journey to get to where you are today?

Michelle McPhee: Absolutely. So I’m sure it does seem very strange these days to start a job straight from school, but back when I was at school, I really didn’t want to study full-time. I was trying to think about what’s next for me, and the RBA had a really good program where you could work and they would support your study part-time. So I thought, “Well, that works well for me.” I was lucky enough to get a scholarship from the bank to finish my studies full-time. When I finished, I was very fortunate to get what was my dream job in financial markets. I spent about 10 years in financial markets, moving through the different functions: the foreign currency reserves management, as I said, moving into FX dealing, and I also worked in our market operations, which is mainly dealing in our domestic market.

Then I decided to take an opportunity to move into risk management, which was, again, at the time, what I thought was just a wonderful job. Risk management is such a key business enabler, and it’s something that all businesses need to do super well...

Then something came completely out of left field. When Philip Lowe was made the governor, he called me in and suggested that I move to the head of banking. Now, I was a bit shocked, it has to be said, because I didn’t really know anything about banking, never worked in banking, didn’t know the team, but he thought that this was a good opportunity for my professional development. So I had a few chats to people in the organisation that I trusted and had a think about it with my family, and then I thought, “Yes, I will. I will take the opportunity. As you think, what’s the worst that can happen? I’m sure I’ll learn a lot doing it,” and I haven’t looked back. It was a tremendous opportunity to move into banking and payments, which is such an incredibly interesting and evolving space, and that role led me to where I am now.

Q: How do you find the confidence to embrace moments when you are outside of your comfort zone?

Michelle McPhee: It’s happened many times in my career. The first time was when the opportunity came to be the head of risk management. At the time, I was working three days a week. I had caring responsibilities. My husband had a really big job. That opportunity came along, and I thought, “No, not really, I don’t think I’m really ready for that.” A senior colleague came up to me and said, “You really need to apply for this job. Don’t worry, you’ll just make it work. We’ll just find a way to make it work.” Then I applied for it, and then I got it. I thought, “Well, now I really do need to make it work.” But I really did, but I would not have done that at all had this colleague not said to me, “You really should try for this opportunity.”

So, I do think it’s great to have people around you. And also, we should be looking around us for people who can do roles, who might not be putting themselves forward. I think it’s really important that we open their eyes, I guess, to the opportunity and how they can make a job work for them on their terms. I think that’s a really good role that we can all play as leaders.

Q: How do you approach decision making when the stakes are so high and the impact is so broad?

Michelle McPhee: That’s a great question. I try to have absolute clarity on what we’re trying to achieve. In a policy space, there’s many different avenues you can go down, there’s many different stakeholders, there’s always trade-offs when you are making policy decisions. So I think it’s really important to be clear with your team what exactly you’re trying to achieve, and when you have that clarity, it becomes much easier to navigate through the noise...

The other thing is to be really clear on the trade-offs. If I do this, I don’t do that. If I do this, this will impact this group. Can I accept that? Do I need to change something? The other thing is seek counsel. Ask people for their opinion. It’s hard for everyone to know everything all the time, so it’s really important to find a group or someone who is an expert in the area and ask their counsel. Run a straw man past them. Think about how it might go, and you’ll get different perspectives... but I think being clear on what your outcome is and what you’re trying to achieve.

Q: How do you manage a high-pressure job?

Michelle McPhee: Well, I like to surround myself with people who are, I call them high-energy people, but they don’t have to be. They give me energy – they don’t have to be high-energy people, but just people when I talk to, they make me feel more constructive – they kind of pull me out if I’m in a bit of a rut. I find that really helps me.

The other thing that I really find is helpful is finding a tiny little part of every day to do something that you really love. Even if it’s 10 minutes where you listen to a song you really like. I really love running, so I try to go for a run every day, listen to a podcast, read a book. It doesn’t have to be hours. It can just be a little snippet, because then I always think to myself, “Well, that was a rough day, but that doesn’t matter because I got a run in in the morning.” So, the day has been a good day if I can get a run in, and that’s a good thing.

So I think that’s just a way of actually making sure that it’s not all stress – it’s not all drama. You take a little bit of time for yourself, just reset yourself, and then you can get into the next day and help deal with some of the issues you’re dealing with.

Q: What strategies do you use to balance work and life?

Michelle McPhee: Well, like most people, I kind of do my best, and I don’t always get it right. But I do feel that careers go through cycles, and your work/life balance goes through cycles as well. So there may be some times where you spend a lot of time at work, and you have to just try and work through your family commitments. There are other times where your family commitments are more important to you, and you just have to balance the work. I do see a lot of really positive change. I remember when I asked to work from home, I was the only person who worked from home... but now that people work from home, there’s so much more opportunity for women to balance their careers. So it’s such an incredibly – much more enabling environment here. You have to find a mix that works for you. You have to make the trade-offs that you can live with, but it is possible to balance it.

Q: What’s top of mind for the RBA right now when it comes to the future of payments in Australia?

Michelle McPhee: Well, there’s many things about the future of payments. I guess two things that I’m spending a lot of time on at the moment, one, is the future of cash. While many of you might think, “Well, I don’t really use cash,” there are around 1.5 million Australians who have actually told us in surveys that if they didn’t have cash, it would cause them significant hardship. So we do feel it is something that we need to work through. Also, when we talk to our overseas central banking colleagues, particularly those in nations who have all but gone cashless... they’ve actually found that it’s had some unintended consequences. They’ve found that it actually reduced the resilience of their payment system. So we really feel it’s an important national issue to ensure cash is available, and we’re working with our colleagues at the major banks, in the industry, the major retailers, our fellow regulators, the government, and organisations like Australia Post to find a solution so we can make cash available.

The other issue we’re dealing with is account-to-account services, and again, this will be a service that many people here just take for granted. The rails that underpin the account-to-account service are getting a little bit old, and they don’t necessarily have the kind of attributes that the consumer is looking for with payments, so they’re not necessarily data-rich, and they’re not necessarily fast enough. But they are incredibly reliable, and they are very cost-effective. So we’re really working with the industry to try and find a way to shift that volume, which is almost the vast majority of account-to-account payment volume in Australia, over onto faster rails.

Q: What advice would you give to women in finance who aspire to be in senior leadership?

Michelle McPhee: Well, I would say yes to opportunities. Say yes to opportunities. Think about what each opportunity can give you as you move through your career. Movements in careers – it’s not a straight line. You don’t go straight up. You zig and you zag, and sometimes you might even think you’ve gone a little bit backwards, and then you move a great leap forward. But if you say yes to opportunities, you will always learn something new. You’ll learn something about yourself. You’ll learn something about the subject matter that you work with. You’ll find that when you want to move on to that next big step, you have such a breadth of experience and a wealth of things to offer that next company or that next opportunity that you want to take advantage of. So I would say yes.