blog Those of you who have been Delimiter readers for several years will know that the ANZ Bank has not precisely covered itself in glory in the march to reform core banking IT systems. While the Commonwealth Bank has been engaged in stealing a march on the rest of Australia’s banking sector through its landmark Accenture/SAP-driven overhaul and Westpac and NAB have been trying desperately pushing their own comparable projects to catch up, ANZ has sat on its hands.
Last week the Financial Review reported from the sidelines of a Pegasystems conference in Las Vegas that ANZ was still refusing to remediate its ageing core IT systems. The newspaper wrote (we recommend you click here for the full article):
“ANZ Banking Group chief information officer Scott Collary says there’s still “no compelling business case” for the bank to invest $2 billion and spend five years performing a core IT systems overhaul.”
It’s an easy statement for Collary to make; and of course there is some logic to the CIO’s argument. It’s true that ANZ is able to innovate at the customer user interface layer while leaving its core IT systems untouched, by developing its mobile apps and pushing new products through its website. This is a basic for any bank in 2016.
However, it’s also true that ANZ’s systems are, right now, fundamentally incapable of the same speedy transaction processing as those of the Commonwealth Bank, which have accelerated to (according to my own experience as a customer) near-instant speed. CBA calls it “real-time”, and I’m inclined to agree.
As a small business owner, I constantly hear from other small business owners that everything they do with the Commonwealth Bank appears to have sped up over the past few years. Payments come and go much more quickly, and the Commonwealth Bank appears to be constantly adding new features onto its banking platform that the other banks don’t. The net result is that they have better access to more money and can do more with it, plus less frustration at having to “wait” for processing delays.
This all adds up to a noticeable impact on the overall speed of conducting business. For any type of business, this matters a great deal.
Right now, there is a ‘halo’ effect that surrounds CommBank’s core banking overhaul project that gives strong credence to the business case for its first mover advantage in the core banking IT race. I’m not sure that ANZ really understands just how powerful this overall effect can be. If it did, I would suspect it would be quite worried indeed.
Because the longer ANZ delays this, the further behind it will fall, and the harder it will be to catch up. That’s the problem with Collary’s statement: It may be correct today. But it may not be correct in a year’s time; and that will be much too late.
It bears remembering that Australia’s banks, in 2016, are essentially highly sophisticated software houses. And if there is one thing that we know about software, it’s that it gets out of date real fast.
Image credit: ANZ Bank