Westpac has spent $507 million of its $2 billion budget in the first year of the bank's five-year IT transformation project, the bank revealed yesterday.
(Credit: Suzanne Tindal/ZDNet Australia)
The so-called Technological Strategic Investment Priorities (SIPs) accounted for about half of the bank's $1.1 billion project spend over the last 12 months, according to its full-year financial report.
Westpac had invested across 15 SIPs over the the last financial year ending 30 September, including the implementation of a new online banking platform as well as consolidation and upgrades of the bank's datacentres.
Software spend rose by $203 million to $832 million as of 30 September, with some $97 million tipped into improving payment and collection systems; $60 million into enterprise-wide shared services; $47 million into front-end systems, including its Spider teller platform; and $28 million spent into its datacentres as well as security and testing systems.
The bank's technology and product operations arm grew by some 1146 staff over the same period to support the projects, while 291 full-time staff were hired across customer-facing roles including its call centres.
By March, Westpac will have implemented a new IP telephony system across its branches; upgraded two datacentres and decommissioned another; migrated 5 million paper signatures into a digital system; and installed a collections case-handling system.
Westpac plans to have a new online banking platform by financial year 2012, which it pegs to be faster, more secure and mobile-friendly. The current system has been blamed for a spate of serious outages.
A large part of Westpac's technology upgrades is still pending, however. The bank announced last month it will delay the massive overhaul and transition of its core banking infrastructure to the Hogan platform until 2014. Hogan is used by St George Bank, which Westpac acquired last year.
The SIP investments led to a rise in operational expenditure by some $177 million as a result of new hires, and a boost in IT and professional services.
The SIP projects are being "tightly managed" through technology head Bob McKinnon, who joined the bank in 2008.
Last month, McKinnon told journalists that the former occupants of Westpac's IT department had left the place in a mess, noting that back in 2007, the bank had experienced about 30 Severity 1 IT outages per month. Those outages are considered the worst as they do not have an immediate fix and affect the bank's ability to conduct business.