In a bid to enhance customer outcomes and match the cost-to-income ratios of leading competitors, Westpac initiates a bold upgrade of its technology simplification programme. The bank will commit around 30% of its annual investment spend of USD 1.17 billion - USD 1.3 billion out to 2027/28 to Project Unite – 85 initiatives that will eliminate technology duplication in the group by cutting the number of platforms from 180 to 60.
Technology duplication adds to the cost of running the bank, makes change slower to achieve, and creates complexity for staff and customers. As an example, the cost of implementing Open Banking was about 30% higher than budgeted because of system duplication. The time is right to launch Unite because the bank has completed the sale of non-core businesses and it is close to completion of its Core programme, a risk management upgrade overseen by APRA.
Westpac’s officials said project completed to date include reducing the number of banker platforms to assist customers from six to three, cutting the number of customer onboarding systems from 11 to one, and consolidating nine communications networks into one.
The key projects for the 2024 financial year include reducing the number of Australian customer master files from three to one, consolidating 22 retail electronic identity verification processes into one system, and trimming collections systems from seven to one.
Future projects include cutting the number of contact centre platforms from 12 to one and consolidated 15 workflow systems into one. The platforms that will be used in future are already in place, although there will be some system building. The bank will rely on existing partnerships to deliver the projects. Accenture assists with project governance.
The reduction in cost-to-income would come from efficiency benefits and a reduction in the cost of implementing changes. Westpac’s cost-to-income ratio was 49.4% in 2022/23, compared with 43.7% for NAB and 49.6% for ANZ in the same period. Commonwealth Bank reported CTI of 44% in the December half.
Westpac’s representatives added that the core banking system is not an issue-driver in cutting costs and simplifying things for their banker. The core system will be addressed at the end of their project.
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