Updating the core
None of this would be possible, however, without the underlying core systems. The bank formally announced its Core Banking Modernisation program at the end of April last year — an overhaul of existing legacy system and processes. The enterprise is now about a third of the way through its schedule and has selected SAP for Banking Solutions as a new core platform and Accenture as the program implementation partner. The program's benefits will target customer service, growth, efficiency and risk mitigation. First Home Saver accounts and Colonial First State term deposits are already on the new platform.
"We've made an undertaking that we'll be finished this in four years and we're currently ahead of schedule," says Dave Curran, executive general manager of the core banking modernisation. Curran has been leading the program for the last two and a half years and has been with the group for six years in various roles, including heading up Operations and Technology for the retail services division.
“We have watched a lot of organisations globally, before and during, get bogged down in analysis paralysis; we don’t allow people to slip on decisions and go back and revisit things,” Curran said. “That has let us build some contingency in our schedule as we know we will have some surprises; it doesn’t matter how hard you plan."
The surprises include finding undocumented functionalities in its legacy systems which affected customer-facing systems and services, as well as changes to legislation that affects compliance. And acquisitions. The scope was expanded, at about $150 million, to include ASB and BankWest.
“You base things on the documentation and history. But you find things that were put there 30 years ago that nobody knew about, which makes testing and piloting very important — to make sure we pick things up before we put something into production that will affect customers,” Curran says.
The core overhaul team are systematically working their way through deposits and transactions and the rest will follow. It’s managed around four major planks — the customer, transaction, deposit processing and lending.
"A good example is bank statements," Curran explains. "If you had different product systems — which we've had in the past — then you have different statements and different processes for each of those because they're separate. But a statement is a way to communicate to the customer their balance, transaction history and other information. It should be a common piece that you use whether you're talking about a term deposit, a home loan, a personal loan or a savings account. In the past, when we had different solutions for each of them we had different products for each of them. If you go to common basics, the saving process should be the same. The way you calculate interest should be the same, the way you post interest, should the same.
"We try not to talk about the products within that - the business will package those up and provide offers for the customers. From our point of view it's the capabilities that underpin those."
The numbers game CBA Enterprise Services supports:
- 38,000 staff
- 9.3 million customers
- 1009 branches
- 3300 ATMs
- 4 million credit card accounts
- 187,000 EFTPOS machines
- 5.18 million POS transactions daily
- 10+ call centres
- 120 million calls per annum
- $185 billion mortgage portfolio
- 2.7 million active Netbank users
- 70,000 new registrations each month
- 100,000 regular mobile banking customers
- $20 billion NetBank transactions each month
Deals of the decade
Telstra's 10-year deal with the Commonwealth Bank is not new, although the scope is considerably larger than many implementations. Earlier this year, the Bank Of Queensland extended a 10-year agreement with the telco in a $21 million, three-year deal. Telstra will deliver the bank's fixed lines, voice, data and internet services running on Telstra Next G and Telstra Next IP networks, as well a provision Blackberry devices. The deal came on the back of an exhaustive market review.
Since 2002, Bank of Queensland customers have undertaking telephone banking through natural language voice recognition. But the bank has also partnered with Dimension Data to refresh the technology to include dual tone multi frequency (DTMF) within the platform so customers can also access their accounts through touch tone.
"Customers have the choice of whether they want to use the traditional touch tone, or whether they want to use the voice recognition," head of direct banking, Craig Brownfield, says. "Voice isn't new for us but we've added in the other technology."
The upgrade is a scheduled update, Brownfield says, and includes both a software and hardware refresh.
"Both DTMF and the voice operate off the one environment and that's really the key thing about how we deliver those through the channels," he says. "From a customer perspective, it's about choosing the interaction method and the one registration works for both services. It's very similar to the way we've launched our internet banking and mobile phone banking and SMS. It's all through the one channel just with multi-access points to the customer. If they register for internet banking they also get mobile banking and SMS as part of that. The benefit is it's not about multiple user passwords and IDs. It's about one access point and they choose the method of interaction."
The main driver was to provide the customers with a choice. Although speech has both useful and very successful for the bank, the idea was to give its customers a choice of when it made sense to use different methods, such as on transport or an office environment, when it doesn't make sense to be talking about transactions. Customer requests played a part in the decision to upgrade, but there was also an internal push.
"We've always only had voice - that's the only service our customers have known. But we've had a couple of acquisitions in the last couple of years from building societies that have had touch and their customers are very comfortable with it. There has been some feedback but it was more about being appropriate for different environments."
A recent Dimension Data survey indicates customers preferred internet banking over voice services, but Brownfield says banks must provide both functions to keep customers happy.
"It's different by demographic and function," he says. "For a more complex transaction, yes, an internet interface is obviously much simpler but for utility functions that can be done over the phone, we've had some very good results from speech. It's about convenience - they type of transaction. SMS is the same - very simple, very quick.
"Since we've launched the touch option, we're seeing a 70/30 split in usage - 70 per cent speech, 30 per cent touch. It's pretty much in line with what we expected. And it has stayed fairly consistent since launch. From a direct banking perspective, a lot of the things we've done is about providing the option of choice for customers and making it as seamless as we can. If we look at it from a call centre perspective, we'd like to keep that interaction as quick as possible. We don't want long decision trees and options. It should be one layer at most and then straight through to an operated. But for the automated services, it's about choice. The services we're talking about here are financial transactions versus the call centre which are more enquiry or product-based.
The bank is now looking at ways to provide additional support online, such as chat agents and click-to-call plans.
"We're evaluating those technologies and where they fit into the model. It's about offering the right service at the right interaction point," Brownfield says.
This article first appeared in the October/November print edition of Computerworld.