Westpac Banking Corp Australian financial service boss Brian Hartzer has sought to deflate the focus on technology being driven by rivals Commonwealth Bank and National Australia Bank. A handful of Australian business scribes put the argument to the test, which is an important argument for Westpac given Hartzer’s status as heir-apparent to chief executive Gail Kelly – although she doesn’t appear to be going anywhere anytime soon.
Firstly, The Australian Financial Review’s Andrew Cornell notes with some amusement the comparison that Hartzer makes about the obsession with technology in the Australian banking industry with the focus on the shoes worn by basketball legend Michael Jordon. It’s not about the shoes, but the quality of the player wearing them.
“Customers, he says, don’t care about technology; they care about bank services. Westpac may well be behind on revamping the core banking platform but Hartzer argues, and cites history to support him, that competitive advantage in banking doesn’t come from technology. And if it does, it doesn’t last long…Hartzer is adamant: ‘If you are honest, if you look back over 20 years, no one technical innovation has delivered that sort of return. The reality of life is it is about the customer experience, that’s where your effort must be.’”
The Australian’s Richard Gluyas runs through how Westpac’s rivals Commonwealth Bank and National Australia Bank have been emphasising technology as central to strategy.
“Commonwealth Bank recently completed the migration of its entire customer base on to a new platform and has been crowing about its benefits ever since. At National Australia Bank, Cameron Clyne raised the stakes earlier this month, saying any bank was kidding itself if it didn’t gear up for a top-to-bottom overhaul for the explosive growth in the use of digital channels. He lengthened NAB’s original five-year implementation timetable to 10 years, saying no bank in the world, including CBA, had delivered on the kind of technology rebuild that NAB was undertaking. Westpac is not ruling out a platform upgrade, but it will do so in its own time and at its own pace. Hartzer asked on how many occasions technology had delivered a real competitive advantage in banking during the past two decades.”
Fairfax’s Elizabeth Knight had her eye on a different story – the part that Hartzer has to play as heir-apparent to a chief executive who’s looking pretty solid.
“With Kelly sitting up the back of the auditorium, Hartzer played a political game. He was being judged by all in the room. His ascension to the top job is now no longer a given – not because he has tripped over in the past six months but because Kelly hasn’t. She has suggested recently that she wants another three years as chief executive. This means that if Hartzer wants to take over any earlier he has competition – his own boss.”
While we’re talking financial services and technology, The Australian’s John Durie looks at the arguments of ASX boss Elmer Funke Kupper’s take on the battle between technology and regulators, a crucial topic at the Australian Securities and Investments Commission forum.
“If technology is the new normal, Funke Kupper highlighted how fragmentation between markets can actually hurt investors. If you decide to sell Telstra at $4.50 a share and your broker executes that trade through a dark pool, it opens up chances for others to jump in before the trade is completed. The straight sale is all of a sudden subject to intermediaries taking their slice of the action, and in the process reducing the final take to the seller.
The Australian’s Andrew White was also at the ASIC forum and witnessed the "squelch moment" when the top regulators were on stage were confronted by a question from consumer advocate Choice about the billions of dollars that consumers have lost in the past decade.
In company news, The Australian’s Bryan Frith says the infighting at Leighton Holdings is evidence that the Takeovers Panel should have required Spanish construction group ACS to make a bid for the minority interests of Leighton when it was securing majority control of Leighton’s majority-owner Hochtief.
The Australian Financial Review’s Chanticleer columnist Tony Boyd gives his readers a close-up view of a failed attempt at collusion via the 118-page judgment against Bradken chairman Nick Greiner.
In economic matters, The Herald Sun’s Terry McCrann describes the reformed plan to stabilise the Cypriot banking system as going from worse to even worse.
The Australian Financial Review’s economics editor Alan Mitchell argues that the “tragedy” of Julia Gillard’s prime ministership is the failure to address the post-mining boom productivity problems.
Fairfax’s Ross Gittins explains how delicious a Double Irish Dutch Sandwich is to big international corporates, particularly technology companies.
And finally, The Australian’s Peter Alford reports that Indonesia’s budget has been blown apart because the funding foundation for energy subsidy costs is inadequate, which the government has been aware of for some time.