Banks encumbered with IT legacy, compliance: Experts
- 28 November, 2011 12:29
Australian banks need to upgrade IT infrastructure and data gathering skills if they want to compete with new players such as Google, according to financial IT consultants.
Speaking at an Australian Information Industry Association (AIIA) Banking and Financial Services briefing, director of MillStreet Consulting, Jason Millett (an ex-Westpac general manager), said that banks were slowly changing from a “product centric” culture to gaining a ubiquitous single view of customers.
“One of the things Google talks about is that data drives decisions,” he said. “If you’re interfacing with a customer and you don’t have a full picture of them, than how can you get full value out of that interaction?”
For example, Millett said that if banks got permission from customers to take data gathered on insurance applications people make, they could capture much more information.
“If you were able to combine that with different elements of their life in a regulatory framework that could give you that full picture,” he said.
“Organisations that commit to an enterprise architecture where data excellence is fundamental are going to do better.”
However, data analytics was sometimes hampered by legacy IT equipment. Invest-Ex managing director, Steve Shipley, shared the example of an IT project he did with Lloyds Banking Group Australia where it had to completely rebuild the systems.
“We were only dealing with 2,700 data elements,” he said. “Building it in greenfield, we were able to come up with rationalised data, but even to get that done required a great deal of discipline from the chief executive to make sure we kept to that and created a real strategic asset.”
According to Shipley, larger banks such as Westpac ,which recently announced it had hit halfway in its Strategic Investment Program (SIP) could have between 100,000 and 200,000 data elements which had been created “piece meal” over 45 years.
“You need to hack away and clean that equipment up so it becomes part of every project you do over a 10 year period,” he said.
Commonwealth Bank of Australia business products and development executive general manager, Kelly Bayer Rosmarin, said that its core banking IT transformation project, which began in April 2008, was a continual work in progress.
“I am on a big crusade with people who think we’re in the old paradigm of spending billions of dollars doing a project and then the project is over and there is no money left to build it,” she said.
“While we do invest an enormous amount in technology, innovation is a central part of our strategy at CBA. We also have to invest in compliance that is less exciting but necessary for the stability of the system.”
Looking to the future, Millett said banks had the ability to adopt, adapt and apply IT innovation such as redesigning social networking websites such as Facebook for the financial industry.
“Banks need to be fast followers, rather than first adopters,” he said.
Follow Hamish Barwick on Twitter: @HamishBarwick
Follow Computerworld Australia on Twitter: @ComputerworldAU
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.
Yahoo Mail still down for some users, after an attempted fix
Queensland government to provide 200 services online by 2015
CIOs need to get their house in order, CFO panel says
Is Data Complexity Blinding Your IT Decision-Making?
Why IT projects really fail
Complexity Ate My Budget
It’s high time we tamed the monster we created! Against a backdrop of sustained and uncontrollable data growth, most of today’s operational problems revolve around backup and recovery. Understanding the hidden costs and implications for data protection strategies is critical, but the complexity of the nebulous and amorphous cloud can make everything hazy. This white paper breaks it down to different dimensions of virtualisation and how to deliver the productivity and flexibility it promises.
APAC Digital Performance
With some of the highest levels of social media penetration, mobile device ownership, and Internet connectivity in the world, Asian markets are ripe for more innovative and adept interactive engagement. In this study, we look at how marketers in the region express high hopes for digital, but hare held back with limited budgets and a region-wide lack of talent and training. Click for more
Siemens Redefines Efficiency
Siemens is leading the migration to a smarter energy grid by enabling utilities to collect and analyse data from the new generation of smart meters, providing both utilities and their customers usable information to make smarter energy decisions. In this case study, we look at how they could provision full stack environments quickly and flexibly leveraging a shared hardware model, and one the delivered performance and scale to meet large testing requirements.