With a billion-dollar core-modernisation project coming to an end, Commonwealth Bank CEO Ian Narev has outlined how the bank will identify and move forward with new technology projects, saying that it will be some time before it takes on another initiative of the same magnitude as the transformation project.
Narev reiterated to analysts today that the group, under his leadership, remains committed to technology change and advancement, adding that in the last six months, one million more business accounts have been moved from the bank's legacy system onto its new, SAP-powered core. The bank now has over 10 million accounts running on the new core system.
"Core continues to track to the forecast that it should [in terms of spending]. There's a lot happening this year, but then it starts to tail off pretty significantly after that," Narev said. This would give the bank breathing room in terms of the capital it can spend on other things, but that doesn't mean that it would jump into another major project.
"I doubt that we are going to need to, or want to, take on a single project of the magnitude of the core-banking modernisation program again in the near future, but we are going to continue with technology investment," Narev said this afternoon, adding that the executive team will be approaching the added capital with caution as it plans future investments.
"Once the core spending tails off, it frees up some capacity, [but] what we're not saying as an executive team is, 'great, we've got $300 million, how can we spend it?'
"The way we look at the project portfolio is: we take a bottom-up view of what the best projects are, then we screen those projects against two [metrics]. Number one, we ask, 'is it a palatable level of overall investment spend', and number two ... 'do we have enough expert technical resource in the company to do all of the projects'," Narev said.
As the core-migration project comes to a close, however, the bank's technology steering committee — of which Narev is a member — must decide what to do with those who have spent years working on the project. Narev said that he will stay true to today's commitment of no outsourcing and no wide-reaching redundancy programs.
"In terms of the people ... some of them are consultants that we brought in from different places to help, in fact quite a number of them, and others of them, we have individual plans that ensure that the valuable experience that they've gained can be brought to bear in other parts of the group," he told ZDNet Australia.
An example of two new projects using the core-banking migration as their base is the bank's peer-to-peer payments product, Kaching, and its online-only Goal Saver account. The Goal Saver account, in particular, Narev said, has seen hundreds of millions of dollars of deposits in the last 12 months.
Narev promised more details regarding the bank's core modernisation in April.