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How is the Global Financial Crisis affecting Bendigo and Adelaide Bank?

Andrew Watts: This has been the most serious financial crisis since the 1930s. Like all the challenges we have faced in our 150-plus year history, we focused on the things that were within our control. The continuity of funding was the biggest issue for banks. Our interest margins have been under pressure through much of 2008 and 2009 as we re-structured our balance sheet to reduce the reliance on wholesale funding.

Markets continue to be relatively fragile, but now we look forward with confidence. We continue to attract new customers and open new branches and our credit quality and capital position is strong.

What impact did the merger between Bendigo and Adelaide banks have on the company’s IT investment?

Both organisations were in the process of progressively re-engineering their technology platforms to deliver greater flexibility to the business. When integration planning commenced, we re-prioritised some work to ensure that resources were available to support merger activities. However, we approached the integration program in a way that was aligned to our re-engineering program. Pleasingly, both organisations were pursuing a similar technology direction.

We continue to make investments into our systems, particularly to make them more customer-centric. Our business strategy is about becoming Australia’s most customer-connected bank and therefore our business processes and systems must support customer engagement.

In what ways have you managed to cut IT costs during your tenure?

We have focused on all he usual things, particularly in achieving synergies from the merger. We have consolidated our data centres and networks. We have consolidated and re-negotiated supplier contracts and are progressively rationalising our business applications.

What are some of the challenges involved in providing IT to a franchised business?

From an IT perspective, our Community Bank branches operate just like any other branch. They use the same IT services and business applications. They expect the same quality of service our company-owned branches would expect. A customer can experience the same level of service through any branch across Australia.

What’s on the top of the priorities list in terms of compliance issues?

We are still implementing some automation of our AML [anti-money laundering] program. Our AML program is being delivered under a phased approach to meet the compliance timetable and to ensure that our business is ready for the changes.

Are you on track for switching the bank’s operations over to a single platform?

We have moved to single systems where it makes business sense to do so. We have integrated our branch systems, treasury, HR and finance platforms. Early in the integration program we chose to retain both core banking systems, running on common infrastructure, and delivering a common front end through the use of an integration services layer. We wanted to avoid the ‘big bang’ conversion program that can be very disruptive to a business. This approach has proven very successful.

Both banks ran the same core banking platform, which helps. Whilst they have been customised over the years to some degree, they are well architected and we have excellent skills in-house.

We will consider the longer-term future of our core banking platform next year, but in my view there is not a pressing business reason to consider a move to a new platform. The core banking system does its primary job very well — that is, account processing. We are modernising the systems around it to be more flexible and customer centric.

Have you begun the planned implementation of the new customer information system and CRM? If so, what stage is it at?

The program referred to in-house as ‘Enable’ is progressing well and we are preparing for a progressive rollout during 2010. The integration of the new customer information system has provided the usual challenges — the quality and compatibility of customer data and the level of business change across the organisation that needs to be managed.

How much does green IT factor into your IT environment?

Bendigo and Adelaide Bank is committed to building sustainability into everything we do and IT is no different in this regard. We have improved the efficiency of our modern data centres through the use of server virtualisation and achieving a lights out operation. We have standardised PCs, laptops and multifunction devices using more efficient devices and we’re actively driving down wastage in areas such as printing.

The bank’s new head office in Bendigo is a Five Star Green Star designed building and we plan to build a similar building in Adelaide.

What are some of the other projects you and your team are working on?

We are very busy with projects such as Enable, the integration of the recently acquired Macquarie Margin Lending business, AML and completion of the integration program. This will keep us occupied well into 2010.

Clearly, the new customer information system is the cornerstone, as we progressively rationalise and renew our application portfolio to become more customer centric.

The bank continues to focus on its community and partner-based strategy and technology will play a role in delivering new services. You will see more in this area in the future.

This story first appeared in the Computerworld October/November print edition

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