No new IT dollars for ANZ Bank: Smith

No new IT dollars for ANZ Bank: Smith

Summary: Chief executive officer (CEO) of ANZ Bank, Mike Smith, has declared that there will be no new "massive spend" on new IT projects, promising instead to squeeze more out of its existing investments while singling out its internet banking platform for improvement.

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Chief executive officer (CEO) of ANZ Bank, Mike Smith, has declared that there will be no new "massive spend" on new IT projects, promising instead to squeeze more out of its existing investments while singling out its internet banking platform for improvement.

Coins

(Pocket money image by Magnus D, CC BY 2.0)

Speaking to analysts and journalists at the announcement of its record $2.66 billion half-year profit, Smith said that much of the investment in ANZ's IT had created a complex environment for staff and customers.

"What we had done traditionally was create IT projects and systems around our product … in silos. That has lead to a very complex systems architecture," Smith said.

As a result, Smith said that the bank would continue to simplify its IT environment across its global business units, adding that the money that had so far been spent in the wrong areas.

"We already believe we spend about the right amount on IT, we just haven't spent it in the right places.

We spent an awful lot of money on getting very little intrinsic value from some of our systems," he said.

Smith said that the bank's total spend on IT and IT personnel tagged in at approximately $1.6 billion, with a view to rise to $1.7 billion in the next half.

"As a percentage of our total overheads of $8 billion, that looks about right … by comparison to other global banks," he said.

Smith made no secret that ANZ had work to do to improve customer facing systems.

"I think our internet banking needs to be improved and there is quite a lot of attention being paid to that at the moment," he said.

He added that customers can expect more apps like ANZ's goMoney in future; however, he didn't delve into specifics around platforms or timeline.

"I certainly believe you will see more of that type of innovation … from ANZ."

Harry Senlitonga, analyst for Datamonitor warned last month that customers may vote with their feet if they become dissatisfied with the technology offered by their institutions, to which ANZ's Smith agreed.

"I think, as a customer myself, [people leaving due to technology outages is] quite justified," he said, adding that as an ANZ customer, he expects reliability to be a "core principle" of the bank's IT strategy.

Ongoing security

Smith told ZDNet Australia that there had been no sweeping security reviews commissioned as a result of the Sony breaches where millions of customer details went missing, saying that security is an ongoing process in the banking industry.

"Everybody in an industry which is highly dependent on technology … spends a huge amount of time on data security and overall IT security. It's something we take very, very seriously," he said, adding that ANZ must remain constantly vigilant as hackers try new techniques.

"It's something that we're continually having to improve because as IT fraud and hackers tend to look for weakest links, we need to ensure that we continually improve our process."

Smith told analysts this morning that ANZ will update the market on its technology strategy in the next few months.

Topics: Outage, Banking, Tech Industry

Luke Hopewell

About Luke Hopewell

A fresh recruit onto the tech journalism battlefield, Luke Hopewell is eager to see some action. After a tour of duty in the belly of the Telstra beast, he is keen to report big stories on the enterprise beat. Drawing on past experience in radio, print and magazine, he plans to ask all the tough questions you want answered.

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4 comments
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  • sloppy pic choice.
    how is a handful of GBP relevant to a story of anz AUD billions.
    gikku-2ce6c
  • Finally a CEO brave enough to say that they are not spending their money wisely on technology. Wish Westpac'c CEO did the same for the waste that is happening there and gets some heads rolling.
    thinkinghat1
    • It doesn't matter if they move to a shiny new datacenter if the systems and infrastructure in the datacenter is still the same? In regards to the article..its all PR its not plausible in an org that big to stop spending on IT and just move the cash elsewhere. No one has any idea where exactly is the 'right place' to spend money on IT, it's all guess work!
      Barney123-5daa3
  • AT least ANZ has spent the time & money on upgrading it’s data centres and had a good strategy in place of owning and self managing with quality FM staff . Westpac is in the process of getting back control of their data centres by booting out IBM in employing the FM management and are rebuilding their infrastructure. (Regaining control) But what about NAB -WELL while they have the best and recently updated banking data centre in Australia (Knox) that is better than most of the modern ones including ANZ & the finished Westpac, they cant seem to make up their mind about the other East Melb site. Do we dump and outsource, do we upgrade and utilise the good existing infrastructure (over 10 years – guys open the check book). NAB was always the leader but due to continuing to de-skilling & using the other banks cast off management they are still looking to out source and lose control. Dumb Dumb Dumb – Where is my share holder value? Well let’s look at it with the following formula.
    Lost of IT de-skilling and self program management = directly proportional to loss of share price.
    Was $30+ not what is it $23 – bloody hopeless. Say No More – Say No More
    Gottobesaid