Core banking overhaul still off the agenda at ANZ Bank

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Core banking overhaul still off the agenda at ANZ Bank
Scott Collary

Foundation is “irrelevant, almost”.

ANZ Bank is sticking to its plans to leave its core banking platform alone and concentrate on the overhaul of its presentation layers for customers.

ANZ opted against revamping its core systems in 2012 in favour of a $1.5 billion online and mobile transformation drive that would provide visible benefit to the customer, going against the tide set by core banking overhauls at rivals CBA and NAB, and more recently, Westpac.

It made the decision despite the foundation of its core banking platform, CSC’s Hogan technology, having been succeeded by the newer Celeriti platform in 2010, and despite CSC lending its support to SAP’s banking software three years later.

The bank’s digital drive has been boosted by new CEO Shayne Elliott, who since taking on the role this past January has outlined a digital strategy for the bank which included the hire of former Google A/NZ CEO Maile Carnegie to unite the bank’s digital teams.

ANZ was the first to market with Apple Pay in April, and is expected to be amongst a slew of banks to go live with Android Pay imminently following half a year of testing.

It also switched on a new Sybase online and mobile banking solution at the end of last year, and is currently working through migrating its existing applications.

ANZ Bank CIO Scott Collary, who joined the financial institution 18 months ago, yesterday said there was still no plan to tackle the core systems underpinning the bank’s operations.

Hogan remained entirely fit for purpose and was ‘almost irrelevant’ in the wider IT ecosystem of the bank, Collary said.

“The capability we have in the core system is not a hindrance for us. The actual development in the core is not slowing anything down, it’s a fairly flexible environment,” he said.

“There is no compelling business case [to change it]. The product processor isn’t holding us back from doing anything. We’re launching Apple Pay, we’re doing the NPP [new payments platform], we’re doing Android Pay, all this cool innovative stuff, and it doesn’t affect the core at all, frankly.”

As part of a $450 million agreement ANZ signed with IBM last year, the bank recently migrated to the software giant’s newest z13 mainframe and Power8 infrastructure for a private cloud environment.

The mainframe includes the z/OS Connect tool, which allows for APIs to be written directly into the Customer Information Control System middleware to remove historical integration headaches.

Collary argued such tools continued to negate the need to replace the core system of record.

“So an API can be written directly into a core banking platform running on the mainframe in half the time and for a fraction of the cost that it used to require for integration,” he said.

“With the capability we’ve built around payments transaction management, some of the stuff [we’ve] built around the services layer, and now with the new API integration capability, the core is irrelevant, almost.”

The Hogan-based platform will “continue on for a good, long time,” Collary said, “until we hit a point where we can’t do something”.

“The only reason really you would change your core is if it was end-of-life, you couldn’t find people to work on it, it wouldn’t scale to the volumes that you need, or you couldn’t use it to integrate to the rest of the platform and it would slow you down from rolling out innovations,” he said.

“We don’t have that situation. At this point we don’t see anything .. that would require us to spend $2 billion and five years of concentrated effort.”

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