Westpac’s half-yearly results outline how it has been spending money on IT over the last six months. Even though it is no longer stressing over Windows XP, there’s still a lot of money going out the door.
Bank picture from Shutterstock
As with any bank, it’s hard to entirely disentangle Westpac’s technology spend as a single figure. For instance, its “other expenses” category includes an $18 million increase due to “increased technology costs” compared to the previous half.
However, the most relevant figure is the overall investment spend, which is $458 million. Of this, $233 million went on growth and productivity initiatives (heavily driven by technology); $108 million on regulatory change (also influenced by technology) and $117 million on technology change. That last figure includes continued data centre consolidation; Westpac shut a further two data centres during that six-month period.
Westpac says that all 3.1 million of its consumer banking customers are now on its Westpac Live platform. 300,000 business banking customers have moved, remind us again that big migration projects take a long time. Its video conferencing technology is now in 249 branches.
In a year-on-year comparison, software amortisation costs were up $61 million, and “other expenses” were up $67 million (7%) due to “outsourced technology costs”. Outsourcing not being cheaper? Say it ain’t so! (Except it very often is.)