In a statement released this morning CBA said that it had 'invested more than $1 billion over the last 12 months in a range of initiatives to enhance customer experience and drive further process and productivity improvements. The Group's largest single investment, the four year Core Banking Modernisation, remains on schedule at its half way stage and will achieve a number of key milestones this year including migration of all deposit and transaction accounts to the new system.'
Although cost savings are now a lower priority than investment, under Harte's stewardship IT costs have fallen from 19 per cent of the bank's expenses to 13 per cent, although they still remain shy of Harte's goal of 11 per cent. He was at pains to stress that savings had not come at the expense of IT jobs and said that even with 2,300 IT staff the bank is 'hiring more every day.'
Since joining the bank in 2006 Harte has completely overhauled the IT division and ensured IT has become a central plank of CBA's strategy.
Harte said that the bank's IT group was considerably more agile than in the past and was now able to make 1,000-2,000 changes each month to its production environment (customer facing systems) rather than the 400-500 changes it was able to manage a year ago.
It has also improved its record in terms of significant service outages during the year. Last year CBA suffered from lengthy and embarrassing outages to its Netbank service.
Harte said that in the year to June 2008 the bank suffered 66 serious outages, in the six months to the end of December that had dropped to just five.
CBA is widely recognised as furthest along of the four big banks when it comes to the core systems revamp. NAB is next cab off the rank and planning a revamp using Oracle's iFlex in its NextGen programme.
Westpac meanwhile is sticking to its Hogan heritage even as it continues the integration with St George; and ANZ is leaving its core banking system well alone for the present.
If Harte's analysis is accurate though - and the core revamp is now proving an engine for growth and underpinning a pretty impressive interim profit performance by CBA - the other big banks may be forced to quickly up the ante.