Westpac to invest billions in multi-year Unite program

Westpac Banking Group has said it’s expected the average annual investment spend will reach around $2 billion between the financial years 2025 and 2028, under costs associated with its customer-focussed ‘Unite’ program. 

The major bank said the spend is also set to cover growth and productivity and its regulatory and risk agenda.

Speaking at a technology simplification update [pdf] earlier in the week, Westpac CEO Peter King said Unite has three objectives, building better customer and employee experiences plus increased shareholder return.

“Unite will reduce our complexity, meaning lower run and change costs, and to bring this to life we estimate the implementation of open banking cost us over 30 percent more than necessary due to the additional systems that we have at the moment,” King said.

“Unite seeks to end this imbalance and narrow our cost-to-income ratio compared to peers.

“So, in summary, now is the right time for us to embark on this journey. We're well underway and we expect benefits to be delivered progressively out to 2028,” he added.

Westpac’s chief financial officer Michael Rowland said most of its investment “will be expensed.”

“We remain disciplined on cost and our cost reset program will continue to manage the impact on total expenses,” Rowland said. 

“Ultimately, Unite seeks to reduce technology and business run costs and enterprise change costs.” 

Rowland added the bank plans to offer further progress details with the bank holding a “clear plan on Unite and we're excited about delivering it.”

Unite outline 

Westpac’s chief information officer Scott Collary said the Unite program forms part of “advancing our enterprise technology roadmap, which we introduced in 2021.”

“This delivers the group's technology target architecture aligning the common platforms.”

Collary said Unite will “build on the progress we've already made” and “it's about accelerating the level and pace of simplification through a program of coordinated initiatives across the group.”

“The way I think about Unite is within the context of the group's broader tech strategy. They enable our customer-centric build, and they are built to change, evergreen, automated, and digital to the Core.”

Collary said already Westpac has “centralised our data in the cloud, and starting in May we'll move that production to the new Azure-based cloud platform for data.”

“In addition, we're well underway in developing our data products, giving business, risk, finance and our development teams real-time access to quality data for analysis, insights and applications” through AI and data.  

“In terms of simplifying and modernising, we continue to eliminate applications, reducing our footprint and installing leading-edge capability in our infrastructure development, security and systems. 

“We've got more technology than we need but when we benchmark our unit cost it's within five percent of global best in class. We think that's pretty good. 

“We have achieved some consolidation already. We've reduced contact centre platforms from 12 to one, data centres from four to two. 

“We've automated hundreds of processes per year, saving both customers and our people valuable time.”

He added that under Unite the bank will “continue to simplify processes and consolidate 15 of our workflow systems down to our three target systems.”

“We have one software-defined wide area network, creating twice the bandwidth at half the cost. This cut nine networks to one and was recognised locally, regionally and globally for awards in project and network management. 

“We have cloud capability in AWS and Azure and have modernised our mid-range compute platform, saving $30 million a year roughly.” 

Collary said Unite work is “already underway” with the program “about accelerating the next phase as we pursue a more ambitious agenda and removing duplication across the entire stack”

“When we think about Unite, we're taking maybe 180 discrete systems and flows down to about 60.” 

“We've made huge strides in data platforms, and next up is reducing our customer masters from three to one. 

“As our business continues to simplify products and services, we're adjusting our origination and onboarding systems to match. All of this combined will help us deliver better customer and employee experience, which takes me to the top layer.”

He said its customer onboarding system will reduce from 11 to one.

“It's not one big monolithic platform or build. We have roughly 85 initiatives that are sequenced for success. Eleven have already started. Six more will launch before the end of the year. 

“We have good business ownership, accountability at each line of business and functional level, and as I have said as we simplify the business the technology will follow.”

Discussing a few Unite initiatives, Collary said Westpac is also “underway with 22 to one customer verification process and our onboarding consolidation.”

“We're moving to a single customer file, migrating all customers to one common API accessible platform, and ultimately consolidating three solutions to one.”