BofA and Deutsche may pool computing resources with CBA
Commonwealth Bank chief information officer Michael Harte has outlined a new era of co-operation among international banks regarding the purchase, development and deployment of computer systems which should send a shiver up the backs of major computer vendors.While Australia's four big banks may be fierce competitors, Harte believes there could be significant benefits from forging closer ties with international banks -for example, by aggregating purchasing power to negotiate better deals on information technology. CBA has for several months been sharing detailed information about its computer revamp and long-term vision with international peers Deutsche Bank and Bank of America, which have in turn opened their IT kimonos.The banks have always had the scale to be able to drive a hard bargain on pricing when it comes to buying computer hardware and software - but now it looks as though that will step up a level. In a recent speech to CEDA (Committee for Economic Development in Australia) Harte said that an international buyers' consortium was being formed "to create stronger buying power." The banks were keen to appoint a panel of suppliers, and then pay what amounted to spot prices in auctions for IT services. During his speech Harte, who is also the bank's group executive for enterprise services, particularly singled out IBM, Oracle, HP and Microsoft for criticism for failing to offer more competitive arrangements, preferring instead to cling to legacy IT pricing models.Besides using their combined clout to get better deals from vendors, international banks were also collaborating on software development, and joining together to influence banking-related regulations, according to Harte.One key area of interest is creating software to allow banks to develop and use computing clouds. Cloud computing is a hot IT issue, and refers to the creation of a collection of computers, storage and software which can be then be 'rented out' when needed. Users pay only for what they use - and in some cases a third party owns and operates the cloud of computers, storage and software.Some organisations are developing private clouds to use internally (CBA for example now has an internal storage cloud, that it claims as a world first and which CBA users can access as they require). Some are developing hybrid clouds - part private, part open - and some are using public clouds (for example using Google to provide email services).Harte visited a number of banks in New York earlier this month, some of which had developed internal clouds which, he said, "disintermediated" the traditional computer hardware and software companies. Some banks were also sharing IT information and capability, even to the point of creating 'open source' software that could be shared and developed in association with other banks, he said.According to Harte: "Despite the fact that this model of computing would dramatically reduce the cost to individuals and corporations, it still seems to be having to be pushed by the buy side. But the shift is under way," he said. "Where we think we've created something that will reduce the cost