The Commonwealth Bank of Australia registered a 15 per cent jump in IT services expenses in FY16, with application maintenance and development the biggest overall contributor.
Reporting on its full year results, the bank said group IT services expenses grew to $1.49 billion, up from FY15’s $1.29 billion, due to higher software amortisation, increased investment spend, and volume-driven maintenance and data processing costs.
By far the biggest share of the expense was attributed to application maintenance and development ($511 million), followed by amortisation of software assets ($379 million), communications ($203 million), data processing ($197 million), desktops ($143 million) and IT equipment depreciation ($51 million). The bank also registered a $1 million software write-off.
CBA chief executive officer, Ian Narev, told a results briefing that on the technology front the bank was still focused on a process of “continuous innovation” on the infrastructure it has put in place.
Transaction banking was one of the strongest examples of the bank’s investment in technology driving customer preference, he said.
The CEO cited as examples of customer-facing initiatives rolled out this year the addition of ‘Instant Banking’ to the CommBank app, which allows a new-to-the-bank customer to set up an account in less than five minutes, as well as its ‘Photo a Bill’ feature to automatically populate Bpay.
“But again, this goes beyond the retail bank,” the Narev said. The bank now has 40,000 ‘Albert’ EFTPOS terminals in the market, the CEO said.
“Critically 60 per cent of those are new merchants to the Commonwealth Bank and the average transaction account and deposit balances we have with our clients with Albert is above the average for the remaining business banking clients.”
During the year Commonwealth Bank also invested quantum computing research and blockchain technology. It also recently completed a major data centre modernisation program.
The bank’s investment spend grew to $1.37 billion, up 10 per cent on FY15.
CBA reported statutory net profit after tax of $9.23 billion, up 2 per cent.