Comm Bank CIO: Future of banking is real-time, personal

Banks are "architected all wrong"

Commonwealth Bank chief information officer Michael Harte says that the future of banking lies in recreating the 'old fashioned' banking experience of personalised service using the potential of mobile devices, whole-of-life customer data and real-time transactions.

Harte told the Integrate 2012 AV trade show in Sydney yesterday that increasingly banks are competing with companies such as Google, Facebook and Apple when it comes to forming primary online relationships with consumers.

The CIO said that in previous decades banks have spent hundreds of millions of dollars in account-based systems but "we've actually architected it all wrong".

Read Real-time payment platform still needs strong business case: APCA CEO.

Read Banks slow with payment tech innovation: mHITs CEO.

Harte said that the Commonwealth Bank had to re-engineer its backend systems, for "about $1.5 billion" to create a new system using data structures that can track the "relationship between an individual and the organisation on the basis of lifespan", taking account of changing relationship with the bank and other people and the changing roles of the individual for the whole of his or her life.

"What people want is to be able to be at home or in the office or traveling overseas, any time, anywhere real-time richness and be able to increasingly do that through an interface that's rich and mimics or re-presents the intimacy of what you once had [with] face-to-face banking and insurance and brokerage."

"All of those roles that you play and all of the relationships that you have need to be fully emulated in the architecture because every time the circumstances change throughout the day throughout the week throughout the month, [it] changes the whole different set of patterns about you, about your loyalty about your risk," Harte said.

"We now have software that when you're in front of a house... [you can] put your phone up to a property and get all the information about the value of that property, what it last sold for, what it's currently worth, whether or not it's for sale.

"With that information in real time, increasingly with decision analytics we're able to say to the person on the spot, 'We know you, you've banked with us for 15 years, you're good for the money if you want that house. Not only that, because of all the other information we have about you, here is the home and contents package, here is the life insurance package..."

Harte said that increasingly for banks, it is gathering information about customers that holds value, not charging transaction fees. This information can be used by the bank to make targeted product offers to consumers as well as by merchants using a bank's services for POS transactions, for example.

The CIO quoted the late Walter Wriston, who was a Citicorp CEO, who famously claimed that "Information about money has become almost as important as money itself".

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