Westpac tech projects trudge on despite profit drop
Westpac's net profit may have plunged 15 percent to AU$5.97 billion in its 2012 financial year, but the company is still committed to its multi-billion dollar IT projects.
The bank posted a cash profit increase of five percent to AU$6.6 billion, but net profit was dragged down by tax issues related to its takeover of St George Bank.
Westpac's strategic investment priorities program (SIP) covers 14 technology projects, several of which pertain to a core banking system overhaul aimed at boosting productivity across the board. It is all part of Westpac's AU$2 billion five-year IT transformation initiative, which was launched in 2010.
Westpac is now 70 percent through completing all of its SIP projects. A new online banking platform is slated to be rolled out to customers from late 2013 to early 2014.
"SIPs are materially improving the operating environment, and continually improving the stability and reliability of our environment," Westpac CEO Gail Kelly said. "[It is also] revitalising our front-end through investments we made in those systems, teller systems, contact centres, and mobile."
The Spider@Westpac teller platform, which replaced a system that was 14 years old, was rolled out in the first half of the bank's 2012 financial year.
The bank has consolidated its payment hub for clearing and settling payments into a single platform for high value domestic and international payments.
In terms of infrastructure, Westpac has successfully migrated its key online platform infrastructure into Fujitsu's new Western Sydney datacentre, as part of a deal signed last year.
In August, Westpac teamed up with MasterCard to initiate an NFC technology pilot for contactless payments via smartphones.
Last year, the bank underwent a restructure that saw the technology unit being put into a newly-formed group services division.
"This program reduced duplication, and improved coordination between our retail banking and wealth divisions, and in our back offices and technology business units," Westpac said in a statement.
It also cut 200 jobs from its IT department as part of a year-long cost-cutting initiative. Westpac has since outsourced all its software development and maintenance work to several companies, including IBM and India-based firm Infosys, in a multi-billion dollar deal.
The bank currently has around 3000 staff working in technology-related roles and 3000 outsourced IT workers.
So far, Westpac has made AU$238 million in expense savings in its 2012 financial year. Westpac has flagged more job cuts to come, though it said that it will "not be at the rate we've see over the past few years".