CBA years ahead of rivals on IT

Australian banks planning to play catch up with the Commonwealth Bank over core systems' modernisation could be in for a rude shock, according to the programme manager Dave Curran.

But CBA has deliberately avoided making significant changes to the SAP banking system that underpins its core banking platform - it isn't easy to roll out even a "vanilla" banking platform on any scale.

Curran said that since the revamp programme was initiated, in April 2008, any major changes to the SAP system had to be personally agreed by the bank's CEO Ralph Norris.

As a result, less than seven per cent of the code had been changed - mainly to comply with local regulatory or tax requirements. As a result of this, the bank is well-positioned when it comes to installing SAP updates as they become available - rather than being stuck with what could otherwise become new legacy code.

However, Curran claims, in terms of core systems reforms, "We are now at least two years ahead (of rival banks) and some say five years. Anyone who follows us has to do what we have done and it's not easy."

CBA's chief information officer, Michael Harte, claims the bank has achieved de facto exclusivity in terms of rolling out an SAP banking solution in Australia, as it has effectively mopped up all the local SAP banking skills. This will make it hard for other banks to follow in its footsteps.

Certainly banking technology and SAP skills are among the rarest and most expensive IT skills in Australia at present.

Commenting on the three other major banks' progress, Harte said NAB was next furthest along in terms of its revamp, "but it has a completely different strategy - more akin to Jetstar". Harte was alluding to the use of a new Oracle banking platform for NAB subsidiary UBank that will eventually be rolled out throughout the bank.