CBA aims to slash its application footprint by 25 per cent

CEO wants 95 per cent of applications in public cloud

cloud computing / cloud network
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The Commonwealth Bank of Australia currently runs around 3500 applications and chief executive Matt Comyn wants to slash that footprint by 25 per cent as part of CBA’s ongoing simplification efforts.

“We’ve got a big cloud, a public cloud, migration underway,” the CEO told a briefing on the bank’s half-year results. “We’ve got about 25 per cent of that footprint in in the public cloud; we'd like to get that to about 95 per cent. Of course, that comes with lower costs to run lower costs to compete, but also improvements around resilience.”

“Given the amount that our customers are engaging with us digitally, and just the reliance on our systems, it’s just critical that we have an incredibly high level of availability and resilience. And of course, there’s some engineering that we need to make sure that we're building [that] into the way we develop, run, and deploy our software,” Comyn said.

As with other banks, CBA has a big focus on digitisation, the CEO added. Eighty per cent of CBA’s home lending is now digital, end to end, using PEXA.

The bank said today that digital channels accounted for 64 per cent of transactions during its first half, up from 60 per cent in the corresponding period in 2018.

The bank’s report for the six months ended 31 December notes that “Investment to accelerate the use of cloud-based technology to reduce the cost of ownership of IT infrastructure” was one of the focuses of the period.

Investment spend for the six months was $672 million, down from $676 million in the last half of 2018, with $131 million spent on productivity and growth initiatives during the half.

Spending on risk and compliance grew 14 per cent to $492 million. That included “Implementing new processes and enhancing systems to address new regulations including the Banking Code of Practice, Comprehensive Credit Reporting Regime, Open Banking, and a number of new reforms across our Wealth Management businesses including Best Interest Duty and Protecting Your Super,” the bank said.

In addition, CBA said it had upgraded trading platforms to ensure compliance with new regulations and reduce operational risk, made investments in protecting customers against security risks and improving IT infrastructure resilience (including investment in the New Payments Platform and data centres.)

CBA’s opex for continuing operations grew 2.6 per cent to $5.42 billion, with the banking citing wage inflation as well as higher IT, risk and compliance costs.

Overall, IT expenses hit $1.23 billion, up from $947 million in the comparable period.

The bank announced a cast net profit after tax of $4.48 billion, down 4.3 per cent.

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