Bank on IT: How the CBA and BoQ do IT

Getting money out of an ATM is easy. Getting the money to customers is much more complex, especially when many banks are dealing with a suite of legacy systems and processes. GEORGINA SWAN withdraws the background picture from the people behind the scenes.

Michael Harte CIO, Commonwealth Bank of Australia

Michael Harte CIO, Commonwealth Bank of Australia

Each morning, sometime between 9 and 10am, internet banking usage at the Commonwealth Bank of Australia (CBA) peaks as just over 100,000 NetBank users log in to check their accounts, pay bills and transfer funds. About $20 billion worth of transactions are made through Netbank every month. And, increasingly, internet banking is not just about moving money around on the Web. The bank's 2.7 million active NetBank users are also taking up new services such as card activation, two-factor authentication and online business services.

The infrastructure and resources powering all this is understandably immense. And underpinning it is the Commonwealth Bank's Enterprise Services management team, headed by group executive and chief information officer, Michael Harte. Enterprise Services is in the midst of a gargantuan program that encompasses online services, enhanced telecommunications and, perhaps most significantly, a four-year, $580 million core banking modernisation to update existing legacy systems and processes within a customer-centric integrated platform.

Ambitious? Harte doesn't think so. The program is tracking well; various milestones have already been met and, as Harte points out, the team has "a proven track record of execution".

"It's not just a slogan," Harte says. "We are getting out of utility and beyond IT in operations. We have a wonderful opportunity to provide our customers more, to learn about their insights, understand their interactions and transaction preferences and allow them to customise what they want."

To support this, the bank opened a new data centre in Sydney - 2000 square metres of usable dual-chamber computer room floor space with full dual Hot Hot redundancy. It also launched a grid-based platform, Oracle as a Service that provides database processing services on demand. It deployed a range of project management initiatives, including Project Governance and Delivery Excellence, Solutions Delivery Lifecycle - which combines intellectual property from SAP and Accenture - and Service Management Maturity. And it developed a multi-partner operating model, introducing repeatable business practice across the enterprise.

The CBA is in an enviable position from an IT management perspective. Its chief executive, Ralph Norris, was himself chief information officer and therefore has a unique understanding of the opportunities IT can bring to an enterprise.

Enterprise services supports 38,000 staff, 9.3 million customers, 1009 branches and 3300 automatic teller machines, managing. Together NetBank, CommSec and CommBiz account for the highest volume of transaction Web sites in the southern hemisphere.

"It's not just the vanilla IT of being cheaper, faster, better. It's about going beyond. We have created the online platform and increasingly tailor to customer presence. Telstra's rollout is well underway," Harte says, referring to the 10-year, $1 billion contract awarded to Telstra in April to provide converged communications for voice, data and video across branches, contact centres, EFTPOS and ATMS.

Earlier this year, the CBA rolled out its new internet banking portal as part of the Finest Online program, adding extra features such as the ability to apply for a credit card online and access more accounts. It also introduced mobile internet banking on 14 of the most popular devices, becoming the first brokerage on the iPhone along the way.

"All the things we're doing, whether it's Finest Online, the IP convergence, networks or the core logic that is going to run the entire bank in terms of how we compute in the future, it's all based on meeting the individual needs of the customers," says Harte. "That's a significant proposition; having the architecture to deliver that.

“The three proof points are leveraging the strategic access that we already have. We have a great team and they have all signed up for the culture of service delivery and leadership, from middle management through to our partners. And the core in and of itself is the greatest enabler to that real time accessibility."

Satisfaction guaranteed

A key initiative of the 'customer centric' approach is the creation of a '40 per cent' standard across the organisation’s management teams; 40 per cent of ‘at risk’ pay — which is also judged on performance indicators such as financial and project delivery — is reliant on reaching specific customer satisfaction targets.

“Everyone across the Enterprise Service team is measured by a 40 per cent customer satisfaction KPI — if our customers are not happy with the reliability of a system, ease of use and access, richness of features and function, then our staff will be penalised,” Harte says.

The approach runs right through to the bank's supply chain so that partners, including SAP and Telstra, are held to the same standard.

“Increasingly, we are building deeper relationships with strategic partners such SAP and Accenture, Oracle, IBM and HP,” Harte says. “Partners are also increasingly involved in our sales and service methodology to become more reliable and responsive.”

The move is aimed at rewarding partners for involvement in the business and performance rather than punishing for non-performance, a situation all too common in many service level agreements (SLAs). Roy Morgan independently audits retail customers for satisfaction and Assert and Insight looks measures success rates for business banking and wealth management operations.

“We are interested in having the [partner’s] account team turn up to work every day and think that 40 per cent of their pay is dependent on how happy they keep the bank and how happy they keep the bank’s customers,” executive general manager, Nick Holdsworth, said. “It changes the conversation with partners at the time of review from: 'I’m sorry about that outage, but we still met the SLA' to 'I’d really like to understand what effect that outage had on customers as it has a direct impact on me'."

The inadequacies of the SLA model could be born out by a simple statistic, according to Harte: the "lunatic situation" of a telephony availability of 99.98 per cent that still lets the carrier have dead air that loses 6000-8000 calls in a morning.

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Tags How do they do IT?Bank of QueenslandCommonwealth Bank of Australia

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