Westpac’s annual results include a breakout of how much money it is spending on IT. While that number has risen in the last year, the bank appears to think that’s worth it.
Westpac picture from Shutterstock
As is the case with many listed organisations, Westpac’s technology spend isn’t neatly bundled into a single category. This is what is says about broad technology expenses:
Other expenses increased $54 million or 3% compared to Full Year 2013. Increased costs related to the Group’s investment program, including higher technology costs and professional services. These were partially offset by cost management initiatives including renegotiation with vendors and migration of customers from paper statements to e-statements.
Clearly, those vendors are still driving a hard bargain. Westpac’s amortisation expenses for existing hardware rose by $11 million during the year, while software amortisation rose by $90 million. (Those numbers aren’t counted in the increased expense total mentioned above.)
Apart from saving money on printing costs, Westpac rolled out its new mobile and online platform, dubbed ‘Westpac Live’, which is now used by 2.7 million customers. It also added fingerprint recognition technology to its mobile apps and updated its wealth management platforms. Behind the scenes, in recent years it has cut back from 9 data centres to 5, and migrated to a single email platform.
Westpac’s announcement also highlights the challenges large organisations experience in trying to upgrade desktop platforms. It says it has “remediated” 452 applications to run on modern desktops, which is essentially code for “OMG Windows XP is no longer supported”. Most bank staff are now on Windows 7, and 190 branches are using “virtual PCs” rather than traditional desktops.