BOQ chief executive George Frazis told The Australian Financial Review the deal with Microsoft was a genuine partnership, rather than a typical client/customer engagement, and involved investment of senior talent on both sides.
“If you look at BOQ’s strategy, it is different to the others in the Australian market because we are going fully cloud, we are developing a fully modern digital platform from the infrastructure to the customer interaction, to banker tools, which is really important,” he said.
“We are developing an API [application programming interface], open system that enables us to partner and adapt our offerings to customers to make sure we remain competitive, relevant, and up to date. It will enable us to develop and change things a lot easier, cheaper, and quicker.”
We’ve got a really clear line of sight as to how we become a more effective and efficient bank by having a lot less legacy tech.
— Craig Ryman, chief information officer, Bank of Queensland.
Mr Frazis is familiar with the challenges posed by overly complex and ageing technology systems running the show at major banks. He was a senior executive at Commonwealth Bank in the early 2000s as it went through a huge core systems modernisation push, before moving to NAB where he said early investments in improving core systems gave it a significant advantage.
However, it was in his stint as St George CEO where he saw first hand the challenges posed when a banking conglomerate does not unite the tech systems running its different brands. Almost 14 years after Westpac acquired St George it is still running separate core systems, with St George’s more advanced systems often used to try out new products first.
“St George itself was an amalgamation of banks. They bought Advance Bank and did what we are doing right now at BOQ, which is to build an end-to-end core banking platform from infrastructure up to customer engagement. It was real time, and it was at least 15 years ahead of most other competitors,” he said.
“If you look at Westpac right now, the digital mortgage launch is on the St. George platform … So actually that strategy worked, the issue of what happened after that, I don’t particularly want to go into.
“But we want to build this digital bank up, and then the real magic comes in terms of how we co-develop [with Microsoft] on the financial services cloud, to really change the experience and the insights and data that we find for our customers, and also make it easier for our bankers.”
BOQ’s CIO Craig Ryman said the shift out of its own data centres into the Azure cloud is planned to be the first of three steps in the partnership, delivering cost savings and reducing the bank’s tech-based carbon footprint.
The second step is to create a platform that gives the bank a so-called 360-degree customer view of their customers, something which banks have long touted with their tech investments, but have thus far failed to deliver due to their complex siloed systems.
Finally the bank is aiming for tech-led revenue growth, through the possibility of developing innovative new products and capabilities, which could also be picked up for broader use by other organisations on the Microsoft Azure Marketplace.
Mr Ryman and Mr Frazis will update the market on progress after its full-year results announcement in October, with early financial benefits of the transformation plan to be laid out.
“We’re really hitting the milestones around building the new bank, and maybe this is a little controversial, but actually building an end-to-end bank with the latest tech, and doing it right from the start, is probably an easier task than upgrading a whole heap of legacy systems piece by piece,” Mr Ryman said.
“Building it is not the super-difficult part, it is managing the transition of our customers between our current bank and then the new bank that we are building, and ultimately migrating them across as quickly as we can.
“We’ve got a really clear line of sight as to how we become a more effective and efficient bank by having a lot less legacy tech … The value in us completing that migration in full is pretty compelling.”
