Changing of the guard: Commonwealth Bank

Changing of the guard: Commonwealth Bank

Summary: Get an insider's look at Commonwealth Bank of Australia's technology operation with chief information officer Michael Harte in the first of our Changing of the guards series examining generational change in the nation's big four banks.

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Commonwealth Bank of Australia is the only one of Australia's four top-tier banks not to have experienced dramatic change in its technology leadership team in the last year. And the bank's chief information officer Michael Harte is taking advantage of the chance to get ahead.

Commonwealth Bank CIO Michael Harte
(Credit: Commonwealth Bank of Australia)

Harte currently has two major projects on the boil — the bank's soon-to-be-released Web 2.0 online banking platform, Finest Online, and a core banking systems overhaul that promises to cut financial product development time from months to hours.

It's been three years since the executive grabbed the reigns of arguably the largest technology operation in the country. Roughly a quarter of Australia's population depends on the systems that Harte was hired in 2006 to remedy. His leadership has shown in the new direction CBA has taken after bedding down its $1.5 billion "Which New Bank?" technology revamp.

The CIO has manned the helm during an era in which the bank aligned new IT technologies to the business via platforms such as CommBiz, First Choice, CommSec and NetBank.

"These are all now the very best in the industry," Harte says of the platforms during a recent interview with ZDNet.com.au. "Think of NetBank being in the top 1 per cent of financial services websites in the world. Think of CommSec being the first brokerage on the iPhone. Think of FirstChoice as the largest asset management platform in the country."

These are the legacies that Harte has brought to the bank over the past years, leaving it in what would appear to be a strong state when it comes to technology. And if Harte ever left? "There are many heirs in line," the CIOs says, although he declines to name them.

"The organisation has a really strong bench and some of them are in IT and some are across the business. There are plenty of people that would step into the breach if I was hit by the bus, or if I decided that surfing was the thing that I finally wanted to do," says Harte.

But while he stakes claim to these platforms, the CIO credits his predecessors for developing the CommSee application — the single lasting legacy of the "Which New Bank?" strategy — which he says was critical to two major IT investments underway that address the front and back end of its business.

Core banking means days, not months

The much-publicised $580 million SAP core systems overhaul, headed up by former Accenture executive Dave Curran, is one example. CBA leapt into the project with all guns blazing at a time when Westpac was tied up in its $340 million integration with St George, and National Australia Bank (NAB) and Australia and New Zealand (ANZ) Banking Group were both amidst major leadership transitions.

But the "first mover advantage" that Norris claims it to be, is one that the bank has been willing to sit on for a number of years. Harte says former CBA leaders — chief David Murray and CIO Bob McKinnon — knew the core systems required an overhaul. But instead they chose to invest in CommSee.

Why they chose to attack those systems first, Harte doesn't explain, but he says: "They did us a big favour. That allowed us the time to attack those back-end monoliths. While it's not complete insurance, having a single front end means that we can stay in business as we replace the back end."

But the question remains: what does the SAP core systems replacement mean for the bank?

"It takes product development off the critical path. And that's a big statement," explains Harte. "Today it can take six to 12 months for some products, depending on how big and complex they are." New products currently mean writing new applications or altering processes that are hard-coded in the mainframe, followed by months of testing.

The new architecture behind the SAP platform will give product owners the power to treat IT as a utility. "You have a very open, highly configured, set of code where you're basically switching on and off options," says Harte. "That gives the market-focused people the ability to offer, in real time every single day, new features so they can go and experiment with new offers rather than wait for product developers and IT people to get their act together."

Changing of the guard

This extensive overview of the Commonwealth Bank of Australia's technology operation is part of ZDNet.com.au's Changing of the guard series, which looks in detail at the use of technology in Australia's four largest banks, following a series of executive appointments that have resulted in an almost complete turnover of banking technology tsars. The remaining profiles will be published over the next few weeks.


Still, the project has only reached the six-month milestone. While CBA's term deposit products have been launched, with more releases to come in May, there remains three pressurised years of complexity on the table.

"There's a very strong will to get this done within three and a half years. It's an extremely challenging and exciting program of work, and it's not without its complexities," says Harte. "There's some very large scale launch and migration work to do, so we have to keep this thing in fast forward to reach that target, because we're talking about the main franchise value of the group."

But another project also has its roots in CommSee — the soon-to-be-released Finest Online campaign, which will deliver a new front end to NetBank that is set to fire up the race for online banking supremacy in Australia. "We've invested significantly over the past two years in what we've termed Finest Online," says Harte. "This is about taking the service components that were for the teller and service centre employees to manage their interactions and transactions with the client."

Put simply, Finest Online is the CBA's Web 2.0 romp intended to boost the attractiveness of self-service by exposing information it already holds, but has only just now integrated, via a single web interface.

We've always watched the Web 2.0 patterns and innovations to understand customers' preferences and behaviours.

CBA CIO Michael Harte

In doing so, CBA and Harte have staked claim to several firsts in the Australian banking sector by incorporating JavaScript pop-up help screens, click-to-chat messaging, loan application progress reporting, and its so-named "universal inbox" that contains communications between the bank and customer such as loan approvals or new statements.

The project also tackled simple obstacles, for example, single password access to every banking product. "Customers can do that very conveniently with one password, one log-in and one place to access all the products and services of the group," says Harte. "Where they want to personalise it, and put their own look and feel on it, they can do that too."

The initiative is the first major attempt in Australian banking to draw together disparate systems under a single interface; and in the context of CBA's recent deployment of banking platforms across all mobile operating systems, it arguably positions it as the leader in the technology stakes.

"We've always watched the Web 2.0 patterns and innovations to understand customers' preferences and behaviours. At the most basic level, people want to be mobile and have the convenience to do anything at any time without programming in two hours of the week to go to the supermarket, and one hour to go to the bank. It's much easier if they have the ease to do it when they remember it," says Harte.

But the investments also signify a new dawn for banking — one that will be marked by accelerated change as online banking services supplant the branch in terms of convenience and functionality. Harte nods to that future when he says: "We want that ease of use and high level of convenience as we drive more and more customers online."

Topics: CXO, Banking, Enterprise Software, SAP

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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Talkback

11 comments
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  • Unanswered questions

    Editor's note: This talkback has been moderated as it contained inappropriate content. ZDNet.com.au is satisfied that the Commonwealth Bank appropriately dealt with any potential conflicts of interest in its core banking overhaul.

    Cheers,

    Renai LeMay
    News Editor
    ZDNet.com.au
    renai.lemay@zdnet.com.au
    anonymous
  • Commbank revamp

    I roll on the floor laughing at this article.
    As a user of Commonwealth bank web services, since its conception. I have seen the reliability and availability of the site go backwards steadily for the last 2 years.

    There commbank 2.0 better be worth it. So far anything they have done has been a failure in my eyes.
    anonymous
  • Vote with your feet!

    If you continue to do business with them despite them being a "failure" in your eyes, then what does that say about you?
    anonymous
  • Westpac online

    http://www.youtube.com/watch?v=D1VdASGXFAU
    anonymous
  • re Unanswered Questions

    Editor's note: This talkback has been moderated as it contained inappropriate content.

    Cheers,

    Renai LeMay
    News Editor
    ZDNet.com.au
    renai.lemay@zdnet.com.au
    anonymous
  • re Unanswered Questions

    yes, I was somewhat bemused at the "anonymous' reply. Obviously written by one of the opposition vendors. They may want to clean up their grammar before they write a response to another tender.
    anonymous
  • re Unanswered Questions

    Editor's note: This talkback has been moderated as it contained inappropriate content.

    Cheers,

    Renai LeMay
    News Editor
    ZDNet.com.au
    renai.lemay@zdnet.com.au
    anonymous
  • No Documentation ?

    there is docu for the whole world to see.

    http://help.sap.com/saphelp_banking60/helpdata/en/06/07b73c4505dd5ce10000000a114084/frameset.htm

    Not sure where the belief there is no docu comes from.
    anonymous
  • Netbank outage

    CBA continue to outsource more and more of the development and maintenance of its computer systems and the management of its infrastructure to multiple 3rd parties. This has significantly increased the risk that they lose sight of the customers experience. The CBA, under Michael Harte, has continued a trend started in the late 90's of awarding huge contracts to vendors, mostly overseas, and then stripping hundreds of jobs from its own Australian workforce. Who remembers Howard Morris who, as CBA group CIO, awarded a multi-billion dollar contract to EDS and ended up working for them a few months later.
    We can expect more of the same as continue to outsource more to foreign companies at the cost of thousands of Australian workers jobs and all resulting in inferior systems and poor customer service. Go figure!
    anonymous
  • dealt with what?

    So why is CBM descoping business requirements, suffering delayed releases and the like? Are they having problems squeezing a bank into a manufacturing platform? Is SAP a solution for a large Bank? How many other Bank's of similar size, are using an SAP solution?
    anonymous
  • Web 2.0 online banking platform

    Hey, building Web 2.0 front end to existing backend services is right way to go, but it is least expensive part of any project - by using existing UI frameworks (Struts, Spring MVC or GWT) and Javascript libraries (eg YUI, GWT).
    My estimate is < 1 mil for big banks online platform re-design (if you are not outsoursing to giant IT companies). Then price of integration modules with other systems (eg legacy, SAP, etc) - that is where the main cost is sitting (>80%)!
    anonymous