ANZ beefs up tech project, online fraud scrutiny

ANZ beefs up tech project, online fraud scrutiny

Summary: The Australia and New Zealand Banking Group has beefed up its scrutiny of large and high-risk tech projects and reinforced its commitment to fighting online fraud.Releasing its financial results for the half-year ended 31 March, the ANZ said it had set up a specialist technology risk function within its group risk management arm "to enhance the approach to technology risk management and to provide additional focus on large and high-risk technology projects.

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The Australia and New Zealand Banking Group has beefed up its scrutiny of large and high-risk tech projects and reinforced its commitment to fighting online fraud.

Releasing its financial results for the half-year ended 31 March, the ANZ said it had set up a specialist technology risk function within its group risk management arm "to enhance the approach to technology risk management and to provide additional focus on large and high-risk technology projects.

"Governance and reporting has also been strengthened with added executive management oversight and monitoring through the project initiative review committee".

The move is part of a package of measures to improve the ANZ's framework for operational risk management and capital allocation, which was first implemented in 2000. It comes as the institution moves to integrate the National Bank of New Zealand (NBNZ), acquired on 1 December 2003, in a transaction identified by the ANZ as a key risk issue for the group.

One high-profile tech project has already fallen foul of the merger, with the ANZ saying it had written off AU$20 million in capitalised software in the six-month period on its Next Generation Switching/Tandem replacement project "as it became apparent that expected benefits would not materialise". That figure was on top of AU$10 million provided last half.

The ambitious Next Generation Switching project was reportedly one of the first in the world to deploy Windows on a large scale for ATM and point of sale transactions. However, according to a report in the Australian Financial Review, the bank's new chief information officer, Mike Grimes, ditched the project earlier this month, citing integration issues associated with the NBNZ acquisition. The bank will reportedly now stay with Hewlett-Packard's Tandem mainframe product.

Also on the operational risk management front, the ANZ said also the "growing trend in electronic fraud" had forced it to focus very heavily on fraud prevention and detection.

"We are making increased use of technical tools to detect anomalies in customer transactions to reduce potential fraudulent activity."

The company added that education will continue to be an essential component in fraud prevention for both the staff and customers.

In response to incidents such as hoax e-mails, false Web sites and computer viruses, a wide range of information has been made available to customers via the new "Protect your banking" Web site.

The ANZ's statement comes amid reports the bank -- one of Australia's Big Four -- has met with its heavyweight rivals and smaller institutions recently to discuss ways of fighting online fraud. The ANZ, Commonwealth, Westpac and National Australia Bank have been particularly targeted by so-called phishing scams, which attempt to secure users' online banking details through a combination of fraudulent e-mails and Web sites.

Other projects noted by the ANZ in its results included: a standard telling business model and improved telling workstation for the branch network, implemented during the first half of 2004; a common administration system covering accounts payable, general ledger, fixed asset management, human resources processing and payroll in Australia and New Zealand and a system replacement for core transaction processing in Australia, as well as a common set of business applications for related processing in Australia and New Zealand.

The ANZ recorded an after-tax profit of AU$1,396 million for the six months to 31 March, up 22 percent on the first half of 2003.

Topics: Banking, Enterprise Software, Outsourcing

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