Customers and cloud at heart of Westpac technology transformation

Westpac Group will increase its annual investment spend by 20 per cent to $1.3 billion with the bulk of it dedicated to technology, digital and simplification projects, the bank announced today.

Addressing a strategy update, Westpac CIO, Dave Curran, outlined his plan to develop a 'Customer Service Hub' that will leverage cloud infrastructure to deliver a single view of the customer across the group's brands.

"If we want to be one of the world's great service companies, you've got to put the customer at the centre of everything you do — and that's equally as true in technology as it is on the front line," Curran said.

Creating a Customer Service Hub will not only enable greater opportunities for omnichannel by enabling cross-channel conversations with customers but enable the bank to "rationalise numerous applications and systems and drive efficiencies as we do so," Curran said.

At the heart of the transformation program is taking customer information from individual channels and making it accessible across the bank.

Along with that data, product information will be excised from the bank's core 'systems of record' and become part of the Customer Service Hub.

Under the transformation plan, the systems of record will continue to be used as registers for account and transaction data. The approach means that Westpac doesn't need to wait for a core banking upgrade, the CIO said.

Underpinning the program will be continuing consolidation of the bank's infrastructure, including increased use of private and public cloud.

Currently, the bank has a single customer solution for Westpac, the CIO said. "But we also have a single customer solution for St George and a single customer solution for BT," he added.

"So within those brands we're very advanced, but we still have the three."

"The first thing we want to do is get to a single customer base across the whole organisation, bring those together," Curran said.

"It's really, really important that if you know something about a customer, the whole organisation knows it. From the customer's point of view, they only want to tell us once"

The aim is to bring in information from across channels so that the bank can "have a continuous conversation with the customer".

Cloud has matured to the point where bank expects material cost savings over the next three years from leveraging hybrid cloud technology, the CIO said.

The group has already carried out significant efforts to consolidate data centres and implement virtualization solutions but still has discrete infrastructure for Westpac, St George and BT.

"The more we can get a single base under what we do, the more we can drive standardisation and rationalisation," Curran said.

"We're going to continue to move to a single infrastructure. That's a path that's already underway and we're going to continue to deliver against it.

"But in addition, cloud technologies have already matured to a point where they bring real value and we need to bring that into the organisation. Not only for the savings it will bring, but also the agility it will bring into the organisation."

The CIO outlined a vision for the group's infrastructure where hybrid cloud and traditional infrastructure will co-exist.

"Every day new capabilities become available in the cloud that we want to be able to consume as we need to, Curran said.

"We want to be able to stand them up, stand them down and buy them cheaply. That said, we are a bank and we're not putting our customer data anywhere near the public cloud.

"So the concept of a private cloud becomes really important — how do you get most of the benefits of cloud but actually keep it secure and inside our environment for the privacy and protection of our customers and the assets of our organisation.

"And then lastly, although I'll be doing my best over time to get rid of it all, we will have legacy applications that remain, so we need the traditional infrastructure to support that."

Private and public cloud and traditional infrastructure will sit underneath a single platform delivered as a platform-as-a-service to the bank, the CIO said.

"What that means is we need to take infrastructure away from the day to day of the bank and provide that as a single solution to the organisation," Curran said.

"To make that real for people in terms of what that means for savings, in the area of storage, [take] block storage: Two months ago a gigabyte of data cost Westpac $0.75 per month; today it costs $0.30 per month; next year it's going to be $0.20 per month; and in three years, at the completion of this program it's going to be in single digits.

"That adds up very quickly when you look at the infrastructure we support. The savings are going to be north of $100 million in that area alone."

Announcing its full year results last month, the Commonwealth Bank said that a focus on productivity and technology helped drive its investment spend to $1.25 billion for FY15. That figure represents an increase of 5 per cent on the prior year.

Follow Rohan on Twitter: @rohan_p