From 700 outages a year to two, tech underlies CBA success: Harte

Summary:Commonwealth Bank's chief information officer Michael Harte reflects on how technology has helped the bank achieve an empathetic, intimate, and trustworthy relationship with its customers.

Empathy, intimacy, and trust are three key goals that the Commonwealth Bank of Australia (CBA) has been striving for, and technology has underpinned the success of it so far, according to outgoing CBA group executive and chief information officer Michael Harte.

Since undertaking a AU$580 million modernisation project of replacing the bank's core legacy banking system nearly six years ago, Harte said the bank has been able to deliver a customer-centric experience in a way that is at a "lower cost, lower risk, and higher value" by getting "closer and closer to the customer".

He said the Roy Morgan customer satisfaction results are reflective of that, where eight years ago the bank was 14 points behind the leader, and it is now in first position.

"I believe we need to be closer, connected, and more empathetic, and we have a role to play to improve intimacy and trust, and usher in technical devices, social devices, and social contracts that will help us evolve and be better people," said Harte on Wednesday at the Australian Information Industry Association NSW Financial Services Forum in Sydney.

As part of the overhaul, according to Harte, the bank has been able to shift 85 percent of its technology spend — which was previously used to maintain the bank's infrastructure — to improving the customer relationship with technology, and leaving just 25 percent to maintain infrastructure.

Other achievements as part of the overhaul Harte listed included downsizing the bank's 23 datacentres to just two, and minimising 700 outages per year down to two.

"[We moved] capital away from that hideous manual paper-based process orientated horror to a relationship-based organisation," said Harte, noting there's still a "long way to go".

"So we took out all the backend systems and all the legacy logic that was based around product, and we said if you can understand the lifespan of a person, and the roles and relationship they have through their financial life, then we have half the chance to delighting these customers and making more and more decisions closer to real-time and pricing [the products] for each of their individual needs."

Harte attributes the success so far to his team of 6,500 operations and technology people, who he will leave at the end of August to take up the role of chief operations and technology officer at Barclays Bank in London, where he will lead a team of 55,000.

For Harte, while the decision to leave CBA was "really hard", the opportunity to be able to service 33 million Barclay customers in various parts of the world versus the 8.5 million CBA customers was one he couldn't turn down, and matches his "quest for scale in this ever accelerating world dominated by digital machinery" .

As for whether we'll see him return to Australia, Harte said he's going to help Barclay out for "five more years and then hang up the boots." He said he'll give "five minimum but I might have to hang around for eight, but I will well and truly retired by then".

In his new role, Harte will be responsible for delivering Barclay's IT transformation, which is currently only a year in, howeve,r suggests the job won't be as big of a task as when he first started the CBA IT transformation.

"They're very advanced; they've got very sophisticated mobile technologies, good social media, fabulous cards, and payment capabilities throughout the world."

He also hopes to retain his relationship with CBA in his new role.

"We're going to stay in contact. There are areas where CBA and Barclays will compete at some stage, but on the main, we're quite complimentary," Harte said.

"The network and the collaboration we have can be beneficial for both, so we can share innovation, share processes, and have rotations of staff, and that's for the benefit of both companies and financial services as whole."

As for final words to his replacement, which is likely to be internal, Harte said: "I wish them luck, and I'm sure they will have every opportunity to be even more successful."

Topics: Banking, Australia, Data Centers

About

Since completing a degree in journalism, Aimee has had her fair share of covering various topics, including business, retail, manufacturing, and travel. She continues to expand her repertoire as a tech journalist with ZDNet.

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