Few industries have been as thoroughly transformed by technology as the banking sector. But despite all the progress made to date, it seems Australia’s banks still have a long way to go before they approach the peak of what digital transformation can deliver.
Banking today is one of Australia’s biggest buyers of IT, with Gartner reporting that spending would hit $27.3 billion in 2023, up 7.3 percent from 2022.
And enterprise IT spending in banking and investment services globally is estimated to reach US$1 trillion ($1.6 trillion) globally by 2028.
Customers have flocked to digital services, with the Australian Banking Association (ABA)
finding that customers of major banks made $126 billion in payments with their mobile wallets in 2023, up 35 percent from the previous year, and overtaking total ATM cash withdrawals for the first time. The ABA also found that 99 percent of all interactions now took place via digital channels.
Blasting legacy
But when it comes to unlocking future capabilities, banks face a significant challenge in the form of their existing investments, with the scale and complexity of historical technology spending making banking one of the industries to suffer most from ‘technology debt’.
At Westpac, whose history stretches back over 200 years, the burden of that legacy investment has become the target of a specific program called Unite.
According to Westpac’s chief technology officer David Walker, Unite’s goal is to simplify Westpac for customers and employees while also modernising it for growth opportunities.
“One (half) is all about simplifying, and the other is all about modernising to go faster,” Walker said.
“We’ve spent a lot to time focused on getting the organisation model and the risk controls in place – really stabilising ourselves as a platform – and getting the right people in to now jump on to this next phase of work.
“Last year we took over 200 applications out of the environment – we had a goal to get 100 out, and we doubled that goal,” Walker said.
It’s not just applications that are in the firing line, however, with Walker looking to simplify entire workflows. One example is ID verification, where the number of processes has been reduced from 22 to just one.
“That is a huge leap forward, and that is about simplifying the different flows across the bank,” Walker said.
The long-term goal of Unite is to reduce the IT landscape by as much as 20 percent, which Walker says will not only allow Westpac to reach best-in-class performance in terms of unit costs, but deliver additional benefits that are specifically important to the bank.