CommBank sees IT spend jump by 13 percent in 1H16

Commonwealth Bank of Australia (CBA) increased spending on information technology services by 20 percent to AU$752 million for the half year ended December 31, 2015.

The bank attributed the increase to higher software amortisation that reached AU$177 million, an increase from AU$165 million reported at June 31, 2015; increased investment in risk and compliance projects; and a 1 percent impact due to the lower Australian dollar.

Other areas of information technology services spending included application, maintenance, and development, which made up for the greatest portion of the total information technology services expenses during the half-year at AU$289 million; AU$108 million towards communication; and AU$99 million spent on data processing.

The bank said in the half year it continued to see strong uptake in its digital and mobile services: Tap and Pay card numbers doubled on the prior half; Cardless Cash transactions grew 96 percent; the value of transactions via the CommBank app was up 27 percent; and 40 percent of Retail Banking Services sales happened through mobile.

During the period, the company highlighted it also made investments in technology and skills, including providing AU$10 million to help Australian researchers build the world's first silicon-based quantum computer, and committing AU$1.6 million to build a centre for cybersecurity education in partnership with the University of New South Wales.

At the same time, the bank was looking into blockchain technology, forming a consortium with other banks worldwide, including Barclays and the Royal Bank of Scotland, to design and develop "disruptive ledger" technologies based on the blockchain system.

The results come with the bank reporting that during the half-year of the 2016 financial year it achieved cash net profit after tax of AU$4.8 billion, a 4 percent increase on the prior comparative period. Operating income came in at AU$12.4 billion, an increase of 6 percent.

CBA group chief executive officer Ian Narev said the company continued to prioritise investment in technology and innovation to improve customer satisfaction.

"Though many of our investments are future-focused, we have already seen strong uptake of our digital wallet and mobile offerings such as Cardless Cash and Tap & Pay, and of new CommBank app services including portfolio view, loyalty card storage, and tailored merchant offers," he said.

"In the first half we also invested in cybersecurity, blockchain, and quantum computing, with an eye to building leading-edge technologies, platforms and skills for the future."