IBS Journal October 2015


Credit Union Australia sets AU$24m aside for tech and digital improvements


Credit Union Australia (CUA) has pledged AU$24 million ($17 million) towards the roll-out of its new loan origination platform, as well as to improve its digital offerings across the board. The company has posted a rise of


eleven per cent in its net profits, as well as a record-breaking AU$3.35 billion in new loans. It’s attributed this success to the implementation of its TCS Bancs-based core banking system. The new platform, according to CEO


Rob Goudswaard, has enabled CUA to launch a number of new services over the past year, contributing to the boost in lending. Now CUA plans to invest some of that profit into completing its loan origi- nations platform, a solution provided by


Decision Intellect. In an IBS case study from 2014 Sue


Coulter, general manager of business trans- formation at CUA, mentioned how the company’s Cobol-based legacy system was inhibiting its growth. Despite encoun- tering a few hiccups in untangling the spaghetti-like network of its legacy main- frame CUA went live with Bancs in late 2013.


Digital improvement Parts of the AU$24 million fund will also be set aside for improving its digital capabilities, to allow the credit union to punch above its weight in the market. This will include delivering a series of improve- ments to CUA’s mobile and online banking platforms, as well as websie upgrades.


‘We were stilted before in terms of


being able to package products togeth- er,’ Coulter said last year. ‘When you look at where we stand with the other cred- it unions, I think we are now leaps and bounds ahead.’ Credit Union Australia isn’t the only


Australian financial institution investing heavily in technology and digital. West- pac recently announced that it would be supporting a technology overhaul with a AU$1.3 billion ($900 million) investment, hoping to ‘propel’ the bank into the future. Commonwealth Bank of Australia has also plunged capital into its core technolo- gy operations, with a AU$1.2 billion ($800 million) injection.


Alex Hamilton


Kiwibank shifting focus online as customers demand digital


New Zealand-based Kiwibank could be considering a major overhaul of its high street presence as a majority of its custom- ers go online. The bank, which is state-owned, runs


accounts for one quarter of the popula- tion of New Zealand and had what was described as its ‘strongest ever’ yearly result in 2015. It reported profits of NZ$127 mil- lion ($79 million) on an overall revenue of NZ$473 million ($296 million), while its cus- tomer base reached just over 900,000. However, the bank operates at a 60 per


cent cost-to-income ratio, mainly due to its large network of high street branches. Chief executive Paul Brock notes that the way Kiwibank customers are interacting with their accounts is changing – 89 per cent of all the bank’s service transactions are now completed digitally. ‘The focus for the future lies in continuing to innovate to transform the group into a digital business,’ he adds.


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Wellington, New Zealand © Kristina D.C. Hoeppner, Wikipedia


SAP integration In 2014 the bank committed to a NZ$100 million ($63.5 million) multi-year core system replacement supplied by SAP, which covers the deposits, loans and payments services. The implementation is set to take another three years, completing in 2018. Kiwibank will replace its legacy system, Ultracs by Ultra data, despite seeming to commit to it in 2010. The new transformation will mean that branches are likely to be closed in an effort


© IBS Intelligence 2015 www.ibsintelligence.com


to cater to greater online interest. Brock says that the bank will aim to team up with local businesses, which will manage servic- es on its behalf. Kiwibank will no doubt be hoping for a smoother implementation of its SAP sys- tem than was achieved by Sydney-based Commonwealth Bank, which eventually went live with its SAP deposits and loans system two years behind schedule.


Alex Hamilton


news: aus/nz round-up


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