More work needed on CBA’s backend systems, says bank’s digital chief

The Commonwealth Bank’s mammoth core modernisation program helped it claim the title of the country’s first ‘real time’ financial institution, but there is still more to do to move some of CBA’s systems away from batch processing according to Pete Steel.

Steel, the bank’s executive general manager for digital, told an Australian Information Industry Association financial services forum that CBA is not resting on its laurels.

“We have the appetite to do even more in CBA, because we recognise technology and digital are really going to be the dominant force over the next 10 years,” Steel said.

Although modernising CBA’s core banking platform delivered real-time banking and real-time settlement, “not all of our systems are 24/7, 365 days a year,” the CBA executive said.

“Some of the systems still shut down for batch processes. We can’t have that in a digital era any more — they’ve got to be always on, they’ve got to be always accessible, because customers aren’t resting.”

According to Steel, some 5.6 million of the bank’s customers interact with it every week using its mobile app or web-based NetBank system.

The rapid growth of digital channels has meant the bank’s real-time capabilities have come into their own, Steel said.

“When stuff happens in a real-time bank — that’s what customers are expecting now days,” he said. “They’re used to real time in every other industry or a lot of industries.”

The CBA executive said that Australian banks were taking varied approaches to the Reserve Bank’s New Payments Platform, which is due to launch in 2017 and make real-time payments more widely available among the nation’s financial institutions.

Some banks are looking to modernise their core banking platforms, he said, while others are seeking to “simulate real time” with shadow accounts. Putting up “too many workarounds or facades” could end up backfiring for banks, Steel said.

On the customer experience front, the bank has turned to DevOps and cloud services to help rapidly build digital offerings, Steel told the forum. The bank has dealt with the challenge of connecting to its backend systems by modernising the integration layer that sits between them and its customer-facing systems, relying on microservices and RESTful APIs.

“We spent a lot of time getting a layer of abstraction right across our systems of record, so all our channels could use them reliably and quickly,” Steel said. The bank still needs to spend more to make those systems of record operate in more of a real-time fashion, he said.

Investing in an API layer means that the bank is prepared for the emergence of new channels, Steel said.

“Let’s say the app becomes yesterday’s news and it’s all about in-car integration or chat bots instead. We’ve got all that functionality so we just have to spend incrementally now.”

He added that for every dollar CBA spends on digital experience, “we’ll spend one or two dollars on data centres and backend integration and getting that right.”