CBA's $800 million software switch
The Commonwealth Bank of Australia (CBA) is implementing a new $800 million computer system it hopes will allow it to identify problems such as Storm Financial in its customer base.
The CBA’s new software system will allow it to track its customers’ product usage across the bank, chief executive Ralph Norris told a parliamentary inquiry hearing on Wednesday night. By allowing the bank to monitor customers’ product linkages, rather than operating in product-aligned silos, the system might help prevent another disaster like Storm Financial occurring.
Norris told the parliamentary inquiry this week that the bank had not been able to easily indentify the links between Storm clients and the bank’s various products. Hundreds of Storm Financial clients were advised by the group to use the equity in their homes, many financed through the CBA, as the basis for acquiring large margin loans, also financed through the CBA.
Norris said banks have grown with “old-style legacy systems built around products rather than customers”. He said the new system was a “critical investment … to make sure we are well and truly protected against this sort of system again”. Norris said the CBA was one of the first banks internationally to implement the new-style system.
Additionally, Norris said the group had gone through its “organisation, customers and linkages to make sure we don’t have another Storm-type situation in-situ somewhere else in our business”.
Norris said he took great comfort in the fact that within its 7,000 financial planning relationships, it had discovered no other systemic problems like Storm.
Recommended for you
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
Australian investors are more confident than their APAC peers in reaching their financial goals and are targeting annual gains of more than 10 per cent, according to Fidelity International.
Zenith Investment Partners has lost its head of portfolio solutions Steven Tang after 17 years with the firm, the latest in a series of senior exits from the research house.
