Westpac has touted its ‘re-use’ strategy in its IT transformation program as giving the bank an edge on competitors.
Speaking to Computerworld Australia ahead of presenting at the CeBit conference in Sydney next week, product and operations division general manager of strategy, execution and transformation, Jason Millett, said the bank was on a journey to creating a customer-centric business.
“What we have done with our IT strategy… was really to say, ‘let’s look at the assets of the group and understand what we have that can be reused, what we need to evolve into a new set of assets and then what we don’t need to touch at all’,” he said.
“There is a really strong theme in our IT strategy around re-use. So the migration of our core banking platform onto the Hogan platform which has existed in St George for some time, people look at that and say it can’t be good because it’s not new. Well actually the Hogan platform with the recent investments that CSC has made in it is a very innovative and leading edge platform that is clearly meeting the requirements of banks like Bank of America, and Wells Fargo, and a number of South African banks.”
Westpac and St George finalised their merger in late 2008 and, since then, the bank has flagged it has saved some $308 million to date, with $543 million of the overall $700 million merger budget being spent so far.
The bulk of these merger spendings had been on IT, systems and operations, at a cost of $254 million. The bank has also said that it had begun to roll out major projects under its technology roadmap during 2009 and during the first half of 2010.
During this period more than 12,000 new PCs and peripheral devices were installed, while the bank’s network bandwidth had also been upgraded to double capacity. A single general ledger was implemented using the Westpac’s Oracle-based system, and a single human resource system was also implemented using St George’s HR Peoplexpress system.
It is also consolidating some 19 systems onto the Hogan system.
“Rather than spending the billion dollars that potentially our competitors are doing in the market, we are going to be taking a much more cost effective and probably more strategic approach in getting to a new core platform, or a re-used core platform, through consolidating onto Hogan,” Millett said.
It has additionally commenced a roll out of 8000 handsets and shrunk its nine Australian data centres to two upgraded facilities in Sydney.
Notably, while the market witnessed the freezing of many IT projects and budgets, Millett said all of this occurred in the midst of the global financial crisis.
“For the Westpac group the last 18 months have been as busy as the previous 36,” he said. “The global financial crisis did impact, and is still impacting the cost of funds and access to wholesale funds in our region. We did acquire a bank in that time and consolidated that post-merger through integration activities, so we really haven’t slowed down.
“I think where it has changed is we are focussed on the need to earn all of our customers’ business. Banks traditionally saw themselves as lending organisations rather than holistic financial service providers, and we’ve had a sharp focus on how we can gather deposits and work with our customers to help them create real wealth by understanding their financial needs and then working with them to help them achieve their goals.”
Millett will be talking at next week’s CeBit conference in Sydney. Computerworld Australia will be bringing you all the news direct from the event so stay tuned.