Craig Bright is talking quickly.
So quickly the now obligatory recording voice transcription AI of media minders and journalists alike is having trouble keeping pace, despite him talking clearly, in straight sentences and lucidly.
It’s not so quick you can’t understand, unless you’re the AI. But there's a delicious irony in the fact that for all the robotic and 'next best' conversations banks are now having with their customers, the speech bot gets tripped up by simple enthusiasm and passion.
Outlining his vision to iTnews, it takes less than three minutes for Bright to reach for a pen and a whiteboard to draw a succinct picture, the diagram, of what he’s trying to achieve.
This article is a first take; we'll get down in the weeds over coming days, but the big picture is important.
The bottom line is banking technology is fragmenting as it becomes more commoditised.
It's also getting cheaper... and a lot harder.
There are several moving pieces in Bright's vision, not least where Westpac is headed with an API driven future and a legacy core (Hogan) that ANZ, Suncorp, St George and a few other institutions also share.
The destination, a little like a Neil Young song, is everywhere and nowhere.
Westpac is building a new model architecture. It’s also keeping the old one. And, quietly and confidently, Bright wants to redefine what makes and breaks bank technology in an age when often it’s technology that makes or breaks a bank.
What a new Westpac looks like
When Westpac handed down its annual results a week ago, chief executive Brian Hartzer made much of the bank’s investment in a new core banking start-up called 10x that’s less a capability and more a platform to redefine what future banking services will look like in a few years.
Unlike the CBA, which became a global front runner for SAP’s new financial services stack to re-architect its proprietary legacy back-end, Westpac isn’t about to ditch its existing Hogan core system that also underpins St George, albeit very differently.
Instead, Westpac is betting on a future where basic banking services, like transactional accounts, lending and a heap of other services will essentially be white-labelled, or in effect resold by brands tied to merchants or other customer bases that may not want to be banks in their own right.
It’s a hedge, and a big one, but logical when you consider how many neo-brands want to own the customer experience but lease or sub-let the architecture base.
“There is a stark contrast between the model architecture required to support the next generation of banking and the architectures that have existed for a period of time,” Bright offers.
“And it doesn't matter in my mind what organisation you walk into, they're all grappling with how to navigate that change.”
Bright insists the transactional strategy, and even the architecture in many respects, is settled and essentially agreed.
Mobile, intuitive, experiential, and customer rather than product centric. Agile rather than monolithic. Immediate not latent.
But it’s a matter of who can deliver those services, irrespective of brand that cuts through.
Bright says it's down to the execution; he wants a "performance" culture on his watch. The voice recording AI substitutes "high performance". Thanks Otter.
Bright says the base that former Westpac CIO and previous CBA core overhaul lead Dave Curran are solid; solid enough to sustain Westpac well into the future and even as a white-label or OEM banking services provider that neos and start-ups can plug into without the need for a full banking licence.
Beyond the core
Put more simply, Westpac’s core offering has been bolstered and “augmented” as Bright puts its through a core rebuild that harnesses its decades long investment in IBM infrastructure, Oracle’s ledgers and Microsoft’s Azure as a customer services cloud hub leveraging both public cloud and best of class on-prem on Dell EMC’s boxes.
But at the same time Australia’s oldest bank is pivoting to be a back-end of choice for what would otherwise be competitors to plug in and resell its capabilities and clip the ticket in the process.
“We see an immediate opportunity in banking as a service,” Bright says.
“You need really low marginal cost and you need scalability.
He says banking as a service is essentially fairly “vanilla” and while it may be nascent you need to be in the game, hence the 10x investment, which Bright admits is still young but hopes to influence as it matures.
Bright reckons a few well-placed architecture bets will pay off, both at forging a new architecture path and bolstering a well laid base as its inevitably transitions.
IBM’s longstanding enterprise-wide contract was recently renewed, Bright says, declining to give a figure; though he concedes its less than it was.
Bright insists that pricing from all vendors supplying to Westpac is now becoming more globally competitive.
“You've got the more thought leadership, engineering, specialty support elements of it,” Bright says of the IBM contract.
“I'm very keen, we occupy more of the engineering sort of thought leadership elements of it. I think that's really important.”