​Westpac bumps 1H16 technology spend up by 12 percent

Westpac Group spent AU$914 million on technology during the half year, including on strengthening its cybersecurity, upgrading 22 branches, and launching its Wonder platform.
Written by Aimee Chanthadavong, Contributor

Westpac Group reported a 12 percent lift year on year in technology expenses, which was reflective of ongoing investment programs that saw the delivery of a number of technology developments.

During the half year, the company spent AU$914 million on technology. Specifically, AU$74 million was spent on "other technology", which included investing in strengthening the company's cybersecurity; another AU$35 million went to data processing; and AU$308 million, which made up a majority of technology expenses for the period, was invested in technology services.

The company also achieved a statutory net profit of $3.7 billion, up 3 percent over the prior corresponding period for the six months.

"Advances in digital technology provide us the ability to improve the customer experience while simultaneously improving productivity and risk management," the bank said.

"In seeking to measure the success of this strategic priority, the group is aiming to reduce its expense to income ratio below 40 percent by 2018."

During the half year, the company upgraded 22 branches into the new format, dubbed Bank Now, which consists of facilities including "smart" ATMs that enable customers to carry out self-service banking functions such as cash withdrawals and exchanging notes for coins. Customers can also check their account balances, transfer money between accounts, and pay bills using Westpac mobile banking in a lounge-style area fitted with dedicated tablets.

This follows on from the AU$40 million the company committed last March to upgrade its regional and rural branches in Australia.

Other developments the company made to consumer banking included simplifying the process for customers when opening a new transaction account, enabling customers to block or unblock credit cards online, and the launch of Wonder, a platform that uses customer information to deliver tailored information in real-time to home-buying customers.

In turn, Westpac reported customer numbers increased by 1 percent, with a rise in customers joining via online channels.

At the same time, the banking group launched a new online platform for St George business customers to immediately connect with call centre personnel through mobile banking, avoiding the need to re-verify their identity, and consequently reducing call times.

The bank also upgraded 100,000 terminals to its Eftpos1 technology, which accepts cards issued by UnionPay International; rolled out new functionality for BT Panorama, including direct trading of listed securities for advised investors; and launched the first phase of its Self-Managed Super Fund offering.

According to the bank, due to the upgrades, complaints across the consumer and business banks fell by 24 percent compared to the first half of 2015.

Westpac New Zealand saw similar upgrades during the period, with the division completing the migration of customers onto the internet and mobile banking platform Westpac One. It resulted in a 12 percent rise in online applications, with the bank saying that around one third of all applications now originate online. Additionally, its fleet of Smart ATMs was expanded, and now operates in two thirds of branches in New Zealand.

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