Westpac CEO Hartzer cops it over real time transaction delays, NPP

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Westpac CEO Hartzer cops it over real time transaction delays, NPP

Hogan now "really quite old and therefore challenging to modify.”

Westpac chief executive Brian Hartzer has come under direct fire in a key parliamentary committee over his bank’s long delays in plugging-in key features of the real-time New Payments Platform, especially PayID, just days after Centrelink revealed it was switching to the transactional hub.

Appearing before the House of Representatives Standing Committee on Economics on Friday, Hartzer confirmed legacy systems at subsidiary brand St George remain an obstruction to being able to declare the NPP activated across Westpac, despite the main bank being up-and-running.

Many of St George and Westpac’s difficulties integrating NPP functionality are understood to stem from problems arising from the mainframe-based Hogan core banking system that, in its Westpac and St George incarnation at least, has found it difficult to migrate off batch processing.

Hogan is now owned by multinational outsourcer DXC after being snapped up by cost arbitrageur CSC. It is also used at ANZ. The system, along with its upgrade dubbed Celeriti, has previously been talked-up as real time capable. 

“We still have, because of the legacy of the St George Bank acquisition, two core operating platforms, one of which is really quite old and therefore challenging to modify,” Hartzer said when pressed on Westpac’s NPP progress.

“The pathway that we took was to build the infrastructure and roll it out through the Westpac brand first and then to shift the effort, once we had gotten those basics in place, to the regional brands.”

Having backed the Reserve Bank of Australia supported NPP as a crucial reform to the electronic payments industry in the face of sharp opposition from US credit card schemes, politicians like Labor’s Matt Keogh are keen as mustard to elicit evidence of progress. Or skin, if it comes  first.

“Why it has taken so long, given there was such a long lead time to getting to the introduction in the first place?” Keogh probed, citing the RBA’s previous evidence that dropped banks in the proverbial.

“Whenever you are making changes to the fundamental payment system of the country, it is very, very complicated. The systems around that are extremely complicated. The risk issues around it need to be worked through carefully,” Hartzer responded.

Keogh’s patience with excuses was about as thin as the RBA’s.

“It doesn't explain to me…why your banks weren't able to go live straight away and, in your case, you have a number of [subsidiary] brands that haven't gone live,” Keogh said, before Hartzer pleaded the legacy defence again.

“We still have, because of the legacy of the St George Bank acquisition, two core operating platforms, one of which is really quite old and therefore challenging to modify,” Hartzer said.

“The pathway that we took was to build the infrastructure and roll it out through the Westpac brand first and then to shift the effort, once we had gotten those basics in place, to the regional brands.”

And like the NBN, and next Christmas, the NPP is totally, definitely and absolutely coming to Westpac’s junior brands like St George and BankSA.

“That work is now underway and goes live in the next few months, from my understanding,” Hartzer said.

So too does the federal election. But, with apologies to Nicholas Cowdery QC,  who’s counting the days.

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