Westpac outlines post merger ICT initiatives

ICT, systems and operations projects consume lion's share of St George merger costs to date

Westpac CEO Gail Kelly has again talked-up the benefits of the bank’s merger with St George, flagging material gains derived from its IT integration.

Speaking at the Bank’s annual general meeting, Kelly said that the integration was ahead or on target in all areas and had achieved large gains in the quality of its ICT.

“I recognised two years ago that our technology platform was unreliable, fragmented and under-investment. It was a key concern,” Kelly said.

“Since then we have made tremendous progress materially improving the stability of our technology environment for both customers and our people.

“We have also begun the process of enhancing our infrastructure for the long term in line with our technology strategy and roadmap. Investment in people and technology will be ongoing,” she said.

In an investor pack released to the ASX, the bank flagged that merger synergies had saved some $308 million to date, and $543 million of the overall $700 million merger budget had been spent.

The bulk of these merger spendings had been on IT, systems and operations, with $254 million spent to date.

The bank said that it had begun to roll out major projects under its technology roadmap during 2009 and during the first half of 2010.

During this period more than 12,000 new PCs and peripheral devices were installed, while the bank’s network bandwidth had also been upgraded resulting in a doubling of capacity.

A single general ledger implemented using the Westpac’s Oracle-based system, and a single human resource system was also implemented using St George’s HR Peoplexpress system.

Those projects are in line with comments from Kelly at 2009’s AGM that the combined banks’ IT strategy would see a combination of systems from both organisations.

The bank has commenced a roll out of 8000 handsets across the organisation, along with the development of a simplified sales and service platform for retail and business banking. It is also implementing the next generation of its online banking platform and rolling out a single master customer record across the whole group.

Westpac has increased its consolidation efforts by placing cards origination and servicing, and enterprise payments onto two single global platforms, and shrinking its nine Australian data centres to two upgraded facilities based in Sydney.

Further projects were expected to be rolled out under the bank’s Strategic Investment Priorities program during the next four years to improve customer experience, deliver productivity gains, and reduced risk.

These projects include migrating key Westpac products and accounts onto the Westpac Group Hogan system enabling real time banking and the decommissioning of up to 19 systems.

The launch of a new technology platform for the bank’s business lending and collections departments, a new mortgage platform, an update to the bank’s network security, and the development of a new testing environment for new applications and infrastructure.

Earlier this month the bank suffered problems with its web site.

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