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Results Presentation For the half year ended 31 December 2009 10 - - PowerPoint PPT Presentation

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DETERMINED TO BE BETTER THAN WEVE EVER BEEN. Core Banking Modernisation Results Presentation For the half year ended 31 December 2009 10 February 2010 Commonwealth Bank of Australia ACN 123 123 124 14 MARCH 2011 | COMMONWEALTH BANK OF

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Commonwealth Bank of Australia ACN 123 123 124

Results Presentation

For the half year ended 31 December 2009

10 February 2010

Core Banking Modernisation

DETERMINED TO BE BETTER THAN WE‟VE EVER BEEN. 14 MARCH 2011 | COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124

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Disclaimer Disclaimer

The material that follows is a presentation of general background information about the Group‟s activities current at the date

  • f

the presentation, 14 March 2011. It is information given in summary form and does not purport to be

  • complete. It is not intended to be relied upon as advice to investors or potential

investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice when deciding if an investment is appropriate.

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Today’s Agenda

  • Introduction

Ralph Norris

  • Core Banking Overview

Michael Harte

  • Maximising Value

Patricia Montague

  • Programme Update

Dave Curran

  • Demonstration

Cathy Bianchini

  • Q&A

Panel

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Notes

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Key Take-Aways

 Excellent progress-to-date  Already delivering real customer and business benefits  An integral part of the Group‟s customer service strategy  Positions CBA for transformational change in banking

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Notes

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An An int integral l part of our strategy

Australia’s finest financial services

  • rganisation

Customer Satisfaction Business Banking Trust and Team Spirit Technology and Operational Excellence Profitable Growth

  • Up 10.5% to 75.4%
  • Equal highest products-per-customer
  • Top Quartile Engagement
  • Strong market share gains
  • Improved Customer Satisfaction
  • Bankwest acquisition
  • Targeted Asian expansion
  • Online market leader
  • Core Banking
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Notes

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Tr Tran ansfor sformat mation

  • nal

al Ch Chan ange ge

14% % of Ne NetBan Bank logins s now vi via mob mobile devi vices In Innova vative Property y Gu Guide iPhone “app” Ne NetBan Bank + + Core Banking Modernisa sation = = Real-time me Ban Banking

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Notes

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Commonwealth Bank of Australia ACN 123 123 124

Results Presentation

For the half year ended 31 December 2009

10 February 2010

Core Banking Modernisation

DETERMINED TO BE BETTER THAN WE‟VE EVER BEEN. 14 MARCH 2011 | COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124

Michael Harte Group Chief Information Officer

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Leading ing posi sition, ion, lead leading ing pla latforms ms

CommSec 15 years as the market leading

  • nline retail broking

platform, Money Magazine‟s Best Feature-Packed Online Broker 4 years running CommBiz Online, secure business and corporate banking... a more responsive and simplified approach to credit FirstChoice Providing customers real time access to secure Super and Investment portfolio information and transacting

  • capabilities. Voted

the leading investment platform by advisers 3 years running NetBank Market leading online and mobile banking

  • solution. Now

integrated with Core Banking to provide real-time transactions for all personal accounts CommSee Frontline customer interface. Single view of customer. Now integrated with Core Banking to provide real-time transactions for all personal accounts Property Guide Our innovative Property Guide iPhone app has exceeded expectations and more mobile applications and capabilities are in development

Forrester’s newly launched Next-Generation Digital Financial Services report highlights key requirements for the next generation of financial services and cites examples of international banks leading the way, including CBA

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Leading ing po position ition

Formally announced CBM programme on 28 April 2008

Modernise legacy systems and processes with a customer-centric platform, and transform associated business operations

Architecture flexible and efficient. Based on the roles and relationships of a customer‟s financial life – not products or accounts

4 year programme forecast to deliver significant value / benefits: – Customer service improvements – Growth opportunities – Efficiency gains – Risk mitigation for aging systems

Governance through Business Leadership, CEO and Board

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The journey we’re on

  • Feasibility paper

prepared

  • Concept paper

prepared for board

  • Partner/vendor

shortlist selection

  • SAP &

Accenture appointed

  • Detailed

evaluation and business case prepared

  • Business case

presented to Board in March 2008

  • Board approved

in April 2008

  • New platform

launched with First Home Saver Account

  • New term

deposit for CFS

  • 53m customer

records migrated to SAP

  • Telling platform

and NetBank integrated to new banking platform

  • 1.2m Term

deposit accounts migrated to new platform

  • 10m retail

deposit and transaction accounts migrated

  • All retail deposit

and transaction customers experiencing real time banking

  • Business

deposit and transaction accounts migrated

  • CommBiz

integrated

  • New capabilities

will be launched: bundling/ packaging, sweeping and pooling facilities

  • Business

lending accounts migrated

  • Retail lending

accounts migrated

2008 2009 2010 2011 2012 2007

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Pr Progress to da date

10m deposit and transaction accounts migrated 1m term deposit accounts migrated 18,000 jobs changed to better serve customers 7 day processing and 7 day value Real-time processing 24 x 7 Christmas peak of 650 transactions per second 53m customer records

We have passed our ½ way point…

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Notes

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Risk Risks an and iss issues

„Execution‟ was the greatest risk initially – Proven delivery capability – Best team in Australia – Advanced world-wide

Contending with „legacy‟ is our biggest issue – 40 years legacy – Unstructured data / Undocumented applications – Massive change

Significant complexity, age and change adds implementation time

Being first means you take calculated risk

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Notes

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Ou Our f future

Strategic Capabilities Technology Customer Service Proposition

Superior customer experience

Partnering On Demand Test & Learn Data Applications Platform Mobile Rich Content Services Insight

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Notes

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Commonwealth Bank of Australia ACN 123 123 124

Results Presentation

For the half year ended 31 December 2009

10 February 2010

Core Banking Modernisation

DETERMINED TO BE BETTER THAN WE‟VE EVER BEEN. 14 MARCH 2011 | COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124

Patricia Montague Head of Retail Bank Transformation

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Our Our customer customers s ar are alr e already eady experiencing xperiencing the the benefits benefits

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Our Our customer customers s ar are alr e already eady experiencing xperiencing the the benefits benefits

Customers can now see transactions straight away

Accounts opened instantly so customers can immediately start to transact/save

CBA account switching on the spot – no closure/re-opening

Clear simple transaction descriptions e.g. transaction type, location, description

Enhanced sales interaction supported by simple product set

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Notes

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Cus Customers tomers are are finding inding it it simpler impler and and eas easier ier to to do do bus busines iness with with us us

Simplification:

Less products, more features = choice (from 16 to 9 retail products)

> 500,000 accounts “cleaned up” prior to migration

Simplified processes leading to considerable time savings for customers

Sales and Service:

High staff engagement

New products: „GoalSaver‟ launched nationally 7th Feb

Electronic delivery of documentation in Netbank

Fewer errors:

–  30% across the Branch Network – Reduction in back office manual processing

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Notes

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Commonwealth Bank of Australia ACN 123 123 124

Results Presentation

For the half year ended 31 December 2009

10 February 2010

Core Banking Modernisation

DETERMINED TO BE BETTER THAN WE‟VE EVER BEEN. 14 MARCH 2011 | COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124

Dave Curran Programme Director Core Banking Modernisation

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To build a great customer-centric bank whose profitable growth is powered by simplicity

Programme Vision Objectives

  • Immediate fulfilment of account opening and servicing transactions rather than
  • vernight
  • Seven day a week value and processing
  • Real time transactions
  • Account opening and pricing, servicing and transaction processing applied at

customer level

  • Consistent data across all channels
  • Comprehensive data across the bank
  • Ability to deliver across the Group
  • Offers engineered based on customer segment needs, not system capabilities
  • Products configured not developed
  • Cross product pricing, conditions and feature configuration
  • Time to market limited by organisation, not systems

Real time banking Customer-centric processing Multi-Entity Customer offerings

  • Separation of distribution from manufacturing
  • Greater visibility of performance
  • Increased specialisation while decreased complexity

Industrialisation

CB CBM vi visi sion and and objecti jectives ves

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CB CBM M visi ision an and objec jective ives

Programme Vision Objectives

To build a great customer-centric bank whose profitable growth is powered by simplicity

Real time banking Customer-centric processing Multi-Entity Customer offerings Industrialisation

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Notes

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CB CBM M Cus Custome

  • mer Of

Offer er Sales ales and and S Serv ervice ice Engin ngine ( e (COSS COSSE) Demonst emonstrat ation ion - Campaigns ampaigns

The core banking programme has delivered the bank a new way to create campaigns This includes:

  • More flexible building blocks to create customer tailored campaigns
  • We can launch campaigns more quickly (including recent examples such

as responding to the floods)

  • Creating a new campaign then flows directly into the sales and
  • rigination process where the campaign is visible to the customer and

they can chose to take advantage of the campaign benefits The following demonstration will highlight a simple example of creating a campaign for a particular region

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Notes

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Ste Step 1: Se Select t th the Introd troductory ry Of Offer r Camp mpaign for r th the Ne NetB tBank Sa Saver r sales prod roduct

Product “NetBank Saver” is selected Campaign “Introductory Offer” is selected

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Notes

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Ste Step 2: Choose se th the account t ori riginati tion pro rocess ss for r cust stome mers rs with a r th a residenti tial address ress in QL QLD

“Account Origination” is selected Customer‟s state is selected “ QLD”

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Notes

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Ste Step p 3: 3: Select Select cus customer

  • mers wit

ith h a m a mini inimum mum age age of 55

  • f 55

Minimum age set at 55

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Notes

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Ste Step p 4: 4: Select Select t the o he onli nline ne chann channel el

Online channel selected

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Notes

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Step ep 5: 5: Spec pecif ify t y the e he expiry xpiry date date

Campaign expiry date set to 31 March 2011

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Notes

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CBM Demonst emonstrat ation ion – Cus ustomer

  • mer Self

elf Se Service ice Experi xperience ence

The core banking programme has delivered a streamlined, real-time customer experience through our assisted and unassisted channels. We are providing the capability for customers to experience more self service functionality This includes:

  • Visibility of all payment transactions in real-time and 24x7
  • Greater transparency and detail of transactions as they happen
  • Real-time, straight through account opening where customers can fund

their accounts as part of the account opening process

  • Customers will now be able to view and apply for campaigns they‟re

eligible for through the self service channel The following demonstration will highlight the above self service experiences from a customer‟s point of view

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Notes

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Custo ustomer mer expe experie rience e nce enable nabled by C d by CBM

Offer

From To

Real time banking

Next business day Instant satisfaction Customer You need this … product Customers like you … Customer-centric Same for most Specific for you, or customers like you Channels Different Consistent Treatment You need a Streamline Let us help you select from

  • ur expanded range

Insight We need to guess This is different from what we assumed Features One size fits most You have a choice

Our customers

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CBM is building a Str Strateg tegic Asset, t, with th expectati tations this this asset t will be enhanced and leverag raged across ross the the Gro Group, beyond CBM

+ +

  • We have the “A” team
  • Investing in a pool of talented

people

  • Vast business & solution

knowledge

  • Business & Solution architects
  • System integration skills
  • SAP expertise
  • Proven large scale (+100 k manday)

release delivery capability

  • Integrated delivery across the

“Banking Platform Stack” – Business case – Release & Migration management – Offer and process design – Requirements & Business simplification – Solution design & delivery – End to end testing – Change management – Programme management

Business Technology Programme Management Capability Design and Delivery Migration Drivers of competitive advantage

  • Implemented in the CBA

environment

  • End-to-end
  • “Multi” enabled application
  • Common integration layer
  • Package & custom built software

“Platform Stack”

Distribution Integration Manufacturing

BI / DW Platform

Corporate Core

Finance Marketing Treasury HR

Products

SAP Deposits SAP Loans

Cross Product

Net Bank BTS CommSee CommBiz CAAS IAM SAP Master Contract Service catalogue

Customer

SAP Business Partner

Offer

Customer Offer Sales & Service Engine (COSSE) (PEGA) Risk BPM Cards Commissions Correspondence Statements Risk Assessment … SAP Financial Conditions (Rates, and Fees & Charges) Unified Payments Capability (UPC) 3rdparties Pricing optimisation … Banking Wealth

Talent Pool Delivery processes Implemented Technology

Internal

  • Enterprise Services staff
  • Seconded Business staff

External

  • Solution (i.e., SAP)
  • Delivery partner (i.e. Accenture)
  • Other service partners
  • Contractors
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CBM is building M is building a St a Stra rate tegic gic Asset sset

+ +

Talent Pool Delivery processes Implemented Technology

1. Is it something you own/control? 2. Does it differentiate you from your competitors? 3. Is the differentiation sustainable? 4. Does it contribute to satisfying customers? Massachusetts Institute of Technology - Sloan School of Management defines as Strategic Asset as something that meets the following four criteria: We believe we have a competitive advantage

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Commonwealth Bank of Australia ACN 123 123 124

Results Presentation

For the half year ended 31 December 2009

10 February 2010

Core Banking Modernisation

DETERMINED TO BE BETTER THAN WE‟VE EVER BEEN. 14 MARCH 2011 | COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124

Appendix

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Ap Appendix ix – De Demo monstratio ion 2

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Ap Appendix ix – De Demo monstratio ion 2

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Ap Appendix ix – De Demo monstratio ion 2

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Ap Appendix ix – De Demo monstratio ion 2

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Ap Appendix ix – De Demo monstratio ion 2

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Ap Appendix ix – De Demo monstratio ion 2

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Ap Appendix ix – De Demo monstratio ion 2

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56 A summary of the account in PDF format including any specific T&Cs for the campaign Bank message notifying the customer the account has been opened

Ap Appendix ix – De Demo monstratio ion 2

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Ap Appendix ix – De Demo monstratio ion 2

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Commonwealth Bank of Australia ACN 123 123 124

Results Presentation

For the half year ended 31 December 2009

10 February 2010

Core Banking Modernisation

DETERMINED TO BE BETTER THAN WE‟VE EVER BEEN. 14 MARCH 2011 | COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124