Changing of the guard: ANZ Bank

Summary:Get an insider's look at the recent history and potential imminent future of Australia and New Zealand Banking Group's technology operation in the third of our Changing of the guards series examining generational change in the nation's big four banks.

Dalton said at the time that the bank thought it had found the right mix, however, since then the bank flagged that it would transfer 500 more positions. The total headcount in Bangalore now sits at around 3500. And the transfer of expertise isn't over. Griffiths says the bank will continue to look at areas for offshoring on a case by case and business by business basis.

ANZ Bank

(Credit: Renai LeMay/ZDNet.com.au)

Yet the bank hasn't completely forgotten its duty to staff. It began an initiative recently where it improved its internal processes for redeployment, formed a $10 million fund for new training and also developed a past employee care fund for those former workers suffering financial hardship.

Employees aren't just moving out of the country. Those in Melbourne are also being shifted around to ANZ's centre at 833 Collins Street, where it has spent money on new technologies such as smartcards, wireless connectivity and power-saving telephones, in an effort to increase productivity and energy efficiency.

Of course, with the global workforce, the bank has been installing 40 Cisco telepresence units in Melbourne, Sydney, Auckland, Wellington, Singapore, Hong Kong and India in an attempt to save money on travel costs and increase efficiency.

Core banking

While Commonwealth Bank of Australia and National Australia Bank gear up to rip their insides out, ANZ has again turned to its super regional vision to provide a guide as to how it should overhaul its core banking platform.

ANZ runs CSC's Hogan solution in its core. Westpac has also been rumoured to be considering Hogan for its internals because it is already in place at new subsidiary St George.

Yet ANZ also has Infosys' Finacle in the wings. It has already implemented Infosys' internet banking system in one area in a project rolled out in Australia in 2006, followed by enhancements and regionalisation in 2007.

The implementation, dubbed "Project Tiger" and led by then group head of retail banking in Australia Brian Hartzer, replaced a system called Edify which the bank felt had come to the end of its life, according to a case study published by Infosys. ANZ wanted the banking platform to be implemented not only in Australia and New Zealand, but also across its banking units in Asia.

ANZ decided not to build its new system in-house, but instead to buy and customise a packaged system which it hoped to make as close as possible in functionality to the Edify system and the bank's strategy for the future. Other key considerations were adaptability, operating cost, scalability and time to market.

Infosys quoted Hartzer as saying that the bank "looked at vendors across all five dimensions, but a lot of them were ruled out because of cost and time to market considerations". The implementation was swift; three million customers moved in 12 migrations over 12 weekends. "We moved people without them knowing it. That was our primary driver. We did not want the customer to see an impact," Hartzer said.

Yet despite this success, ANZ hasn't been jumping to roll-out Finacle more widely in Australia. It's been happy to remain true to its super regional strategy, focusing on Asia. The coming years will see the new core banking engine rolled out across 12 countries throughout that region.

Finacle went live in Laos in early June 2008 and then in Indonesia in November 2008, according to Griffiths. He considers Indonesia to be a coup since ANZ is aiming to be a top four domestic bank in the country by 2012.

China is next on the cards. "We're gearing up for this now, followed by planning for Singapore," Griffiths says. Australia isn't on the horizon. "Our core systems in both Australia and NZ are amongst the youngest and most stable of the major banks," the IT executive explains.

Instead of changing one system for another, the bank will simplify its current systems to have less technologies doing more. "This will then mean less risk when it comes to eventually replacing core systems," he says. "Right now our focus is on Asia. The idea is that we'll start small, learn as we go."

This strategy, being different in its core banking and regional outlook has put ANZ on a different time scale to the other banks in an Australian sense. It has been able to use Asia as a guinea pig for a future Australian core banking replacement, while buying itself time and money in home markets to spend on new applications that will give it a path to its customers' wallets.

This could mean gaining a first mover advantage on a whole host of technologies while its colleagues are fighting an internal battle, either with core systems or a merger, in the case of Westpac. However, like 400m runners in the outside lane, Dalton and the yet to be appointed CIO will need to use their head start wisely, or risk finding Commonwealth Bank of Australia CIO Michael Harte and National Australia CIO Bank Adam Bennett powering down the centre lanes with their newly transplanted hearts.

Topics: CXO, Mobility, Optus, SingTel, Telcos, Telstra

About

Suzanne Tindal cut her teeth at ZDNet.com.au as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for t... Full Bio

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