Commonwealth Bank putting technology at the forefront of its investments

Commonwealth Bank of Australia continued to place heavy focus on investing in new technology during the 2015 financial year.
Written by Aimee Chanthadavong, Contributor on

Technology continued to feature strongly in Commonwealth Bank of Australia's (CBA) overall investments during the financial year ending 30 June 2015.

The bank reported a statutory net profit after tax of AU$9 billion, up 5 percent on the full year prior. The company attributed part of the improvement to its continued investment in technology.

Total operating expenses for the full year increased by 5 percent to AU$9,993 million. Despite this, IT services expenses decreased by 3 percent to AU$1,292 million. This was driven by lower amortisation of software assets, and lower software write-offs in FY15.

IT services related to application maintenance and development continued to make up a majority of all IT services expenses during the year at AU$430 million, up from AU$412 million reported during FY14. Costs associated to data processing, desktop, and communications also increased during FY15.

"Our focus remains on the use of technology to improve all our channels, and to underpin continuous process improvement, to simplify our customers' experience with us. The impact of our technology focus is particularly clear in transaction banking and deposits in this result," the bank said.

Total investment expenses incurred during the full year increased by 5 percent on the prior year to AU$1,246 million.

"The increase is largely due to increased spend on risk and compliance initiatives, branch refurbishment, and other projects, partly offset by reduced spend on productivity and growth initiatives," the bank said.

More specifically, of the total investment expenses, AU$378 million was put towards risk and compliance projects, including improving the group's information security, while another AU$140 million was for brand refurbishment and other costs increased from prior year, largely driven by increased spend on the refreshing of branches and ATMs.

AU$728 million of the investment spend was used for improving productivity and growth, which delivered further enhancements to the group's sales management capabilities, product systems across retail, business and institutional segments, digital channels, and customer data insights.

The bank also boasted it saw productivity savings of AU$260 million during the year.

"At CBA we will continue our significant investment in our long-term strategic priorities. Our ongoing goal is to have highly motivated people putting the customer at the centre of everything we do, and focus on deploying leading technology to simplify our customers' dealings with us, and to continuously make the organisation more productive," it said.

During the year, Commonwealth Bank's investment in technology was evident by the release of its Albert Eftpos terminal and its mobile banking app to smartwatches. It also said that the time spent for online applications on Bankwest have been reduced by 33 percent, and digital channels now make up 12 percent of the opening of all new accounts.

On Wednesday, Commonwealth Bank entered into a trading halt, and will return to normal trading on Monday 17 August, or when it releases an announcement in relation to an expected capital raising.

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