Commonwealth Bank of Australia (CBA) said at its annual results briefing today that it saw the value of a ubiquitous high-speed broadband network for Australia, only if the business case proved economically sound.
Chief executive officer (CEO) Ralph Norris told journalists earlier today that he wouldn't buy into the national broadband argument when asked whether the Coalition's 12Mbps was fast enough for its online offerings.
Instead, Norris offered up the opinion that a business like the Commonwealth Bank of Australia would always view national infrastructure improvements such as internet from a financial perspective before buying in.
"Obviously we all have to, in business, make a decision and trade off between volume and price. For us, we do that all the time. Certainly we do have our own private network. I'm just saying that it's natural that you always look at these things from a business-case perspective and make a judgement based on that. I haven't seen the business case so it's something that I'm not prepared to comment on," he said.
"Obviously, more is better, if it comes at an economic price."
Norris also gave an update for his company's core banking modernisation, giving chief information officer Michael Harte a spirited plug on the way.
Commonwealth Bank of Australia's chief information officer, Michael Harte.(Credit: CBA)
"If I look at the success that we've had in technology, it really comes down to the fact that the leadership of Michael Harte has been a very significant catalyst in the fact that we as an organisation have been able to undertake multiple, major system upgrades, and achieving results pretty much on budget and on schedule," he said.
Norris told investors this morning that the project had already seen around a million term deposit customers migrated onto the new platform. The transactional accounts would be moved by years' end according to the CEO.
The bank has also made significant investments to automate its back-of-house mortgage application system, making it paperless and slashing its application response time from 18 working days down to six.
However, investments in such ambitious IT projects had not come without a heavy cost on the business' bottom line.
CBA's technology spend rose 12 per cent over the past financial year to shoot past the $1 billion mark, with spending in almost all technology areas increasing and the bank as yet providing no explanation of the rise.
In its annual results briefing pack today, the bank revealed that its total IT services spend over the year to 30 June had risen to $1029 million, up from $921 million the year before.
Costs in the areas of application maintenance and development, data processing and communications services all rose, as well as the cost of amortising software assets and IT equipment depreciation. The only bright spot was the cost of desktop services, which shrank slightly.
Bank spokespeople have not yet responded to a request for comment on the rises, and CBA provided little explanation of where they came from.
While CBA is still in the midst of its core-banking modernisation project, it is also enmeshed in integrating new subsidiary Bankwest's systems into its own.
The core banking project was initiated in April 2008 as a four-year, $580 million initiative to overhaul the bank's ageing legacy systems with the aid of Accenture and SAP. In August last year, CBA tipped another $150 million into its budget to bulk up some sub-systems, as well as extending the platform to subsidiary organisations.
After transitioning the retail deposits onto the new platform, it will move its lending deposits, with a completion deadline of mid-2012. After that it will integrate the operations of Bankwest and ASB in New Zealand onto the new core-banking system.