St George sinks telco costs, spends on credit cards
St George has been leaning on suppliers and re-evaluating its technology projects as it attempts to cut costs.
"The bank completed a review during the half which involved negotiation of reduced costs on a number of major supply contracts and reviewed technology programs to ensure funds are directed to the highest priorities," a spokesperson for the bank said, but did not specify which projects were affected.
The total cost savings from the program for the second half of the year are tipped to be AU$16 million, according to the company's half year results released this week.
One contract St George has recently renewed has been with Optus for its business telecommunications.
"They have always been prepared to look at contracts, SLAs [service level agreements] or pricing options in terms that the bank considers important, and they haven't been afraid to break new ground on this front," Paul Bristow, St George's chief manager of IT network services said in April.
The bank's spending on computers has dropped from AU$74 million in the 31 March 2007 half to AU$72 million, according to the results. A spokesperson for the Bank told ZDNet.com.au that the reduction relates to savings in telecommunication costs, finance restructuring and maintenance of the mainframe.
However, St George also intends to invest on technology systems. It will start implementing a credit card system called Base Global as well as building on the existing core system for the Asgard wealth management and enhancing its front end. The credit card platform has recently been outsourced to FIS.
Investment is also being made in the programming of business lending systems, improving operating and processing efficiencies. In addition, the bank has committed over AU$5 million to the systems component of a mortgage re-engineering strategy to increase the use of automated application lodgement by brokers, systems-based semi-approval processes, as well as automatic generation of mortgage documentation and upload of approved facilities to the host system.
Despite Commonwealth Banks recently-announced plans to modernise some of its core banking processes, St George won't be following suit. "The technology strategy does not include replacement of the core Hogan System," the spokesperson said.
"Overall our core technology platforms continue to perform well and have the capacity to meet the growing needs of the business," the bank's half year results said.