Westpac cuts big IT outages from 19 to five

An investment into Westpac's core IT infrastructure has seen the number of annual severity one IT issues fall from 19 last year to five in 2017.

The bank started work under its 'Agilus' infrastructure transformation three years ago, planning to migrate as much as 70 percent of its applications into private and public cloud environments.

In August this year Westpac CIO Dave Curran told iTnews his infrastructure costs had fallen by two-thirds after the first group of applications were shifted into the private cloud.

Westpac is using private cloud for core applications and public cloud for more customer-facing, commodity services. Curran has previously predicted Westpac's entire infrastructure could move to the public cloud within ten years.

The bank had two high-profile outages in 2017: the group's customers were locked out of their online, mobile and some phone banking services over the June long weekend thanks to a failed batch process, while a smaller February outage downed services for about seven hours.

The focus on the bank's IT infrastructure contributed to a two percent rise in Westpac's investment spend for fiscal 2017, it revealed in its full-year results today.

The $1.26 billion investment spend was directed to "growth and productivity initiatives" like the cloud shift, the customer service hub program, and the new Panorama wealth system.

The technology investments had a flow-on effect to the bank's IT expenses for the year; higher software amortisation and software maintenance and licensing costs from the investment program drove tech expenses up four percent to just over $2 billion.

Customer service hub

Wesptac also today revealed it had originated the first lot of mortgages on its new customer service hub.

The bank signed with Oracle last year to provide the foundation of an integration layer that would provide a single and complete view of the customer by linking all the data in Westpac's numerous product and customer-facing systems.

It has chosen to start the architectural rebuild with home ownership. Curran in August indicated the first release would go live before the end of the year.

Westpac today said the first batch of customer home loans had originated on the platform.

The system has the ability to process "all elements of a home loan, including offset accounts", it said.

The customer service hub will go live for all Westpac mortgage customers from mid-next year, with St George, Bank of Melbourne and BankSA to follow from 2019, and the broking channel in 2020.

Westpac has set itself a 2020 target to have digitised the end-to-end experience of applying for a home loan.

Westpac is on track to roll out the service nationally to Westpac customers from mid next year and St.George, Bank of Melbourne and BankSA will follow from 2019, with the broking channel to follow in 2020.

The bank will use its experience of this first phase of the customer service hub program to inform how it delivers other verticals within the bank. It is expected to tackle deposits and transaction accounts next.

Digital drive

Westpac's drive to digitally transform the organisation resulted in the loss of 484 full-time equivalent workers and 59 fewer physical branches in FY17.

The number of digitally active customers grew 8 percent to 4.53 million over the year, with most of this base preferring Westpac's mobile channels.

Digital sales represent 11 percent of all Westpac group sales, up from 8 percent last year.

Westpac is hoping its digital drive will result in a reduction of its expense to income ratio to below 40 percent "in the medium term".

More to come