BOQ eyes IT savings after $17.1m loss

The Bank of Queensland is looking to modernise its systems and processes after becoming the first Australian bank to post a full-year net loss in 20 years.

BOQ today reported losing $17.1 million in the 12 months to 31 August due to bad debts and a soft Queensland economy. It posted a net profit of $176.6 million last year.

Chief executive officer and managing director Stuart Grimshaw said the bank had thoroughly reviewed its loan book, systems and processes after losing $90.6 million in the first half of 2012.

He said the bank had emerged a “fitter” organisation from the year, embarking on projects including the establishment of a shared services centre for HR, IT and Finance by the first half of 2013.

Information technology expenses for 2012 grew $9.3 million to $76.2 million, due in part to a Salesforce.com customer relationship management (CRM) pilot.

BOQ chief financial officer Anthony Rose told investors that the bank was essentially paying for two CRM systems during the pilot. The project was currently in the implementation stage.

Grimshaw said the bank was working closely with Salesforce on developing applications to leverage the CRM, which would allow staff to create customer accounts in 42 clicks rather than 128 previously.

He indicated a new preference for the software-as-a-service model, instead of “hard-wired”, on-premise systems, to tap into the technologies available to its larger-scale competitors.

But he did not disclose any other cloud services the bank could consume, noting that he did “not expect any massive shift” in its systems besides the Salesforce implementation.

Next year’s IT spending would continue at current levels, he said, noting also that the bank had no need for any large core banking platform overhauls.

Multi-channel banking

Grimshaw highlighted plans to invest in customer-facing systems, including getting its online platform “user-friendly”, but did not disclose technical details.

While 90 percent of Bank of Queensland consumers currently opened their accounts in a branch, he said research indicated that those processes were rapidly moving online.

“There’s no doubt that technology … is at the forefront of the minds of consumers,” he said.

“Our competitors are using multiple sources of origination, whether that be in-branch, mobile, online and increasingly through social media.”

The bank hoped its systems and process improvements also would dramatically cut the time it took to approve loans from 84 hours currently, compared to an industry best of 1 hour.