Jahangiri: You continue to make significant progress in aligning IT with Westpac Banking Group (Westpac)'s business strategy and transformation. What have been your key achievements since you joined Westpac some 2 years ago?


McKinnon: When we talked a year ago, the Board had just signed off our IT strategy. This strategy was developed in close collaboration with the business and identified the capabilities required to enable the integration of Westpac and St. George Bank in a manner consistent with Westpac’s multi-brand business model and transformation strategy of putting the customer at the centre of everything we do. It also set out the implementation roadmap to build out these capabilities and deliver on both the integration and transformation agendas.


Since then we have:

• delivered on the early priorities for integration which focused on activities such as infrastructure connectivity and consolidation of the finance, risk, people and treasury systems; and
• brought the IT strategy and the integration and transformation agendas, into a single, well-planned, enterprise-wide program of work.

Consistent with the IT strategy, this program of work, which we call our strategic investment priorities (SIPs), is centred around four key investment themes which will improve the customer experience, deliver productivity benefits or reduce risk:

1. Simplified and innovative customer touch-points, including transformation of the sales and service desktops for our branches and call centres, and a new best in class internet banking platform.
2. Agile and efficient product administration systems, including transformation of our retail banking origination and fulfilment platforms, and modernisation of our core banking, credit card and wealth product systems.
3. Connectivity and efficiency across the entire group including greater use of enterprise-wide shared services and the leveraging and re-use of capabilities across multiple brands.
4. Simplified and robust infrastructure, such as a new data centre, state-of-the-art perimeter security, enhanced enterprise-wide testing capabilities, and a greater commitment to virtualisation and use of private cloud environments.

The total investment over four years translates to a modest increase over and above our historical per annum investment in enhancing business processes and technology.  We have been able to achieve this by aggregating and prioritising our planned investment spend on an enterprise-wide basis.


Overall, we could not have made so much progress in such a short period of time without the full support of the Board and executive team, together with the truly world-class technology team we have progressively assembled.


Jahangiri: How is Westpac’s core banking systems overhaul progressing and how is success being measured throughout the process?


McKinnon: Core banking means different things to different people. For us, core banking transformation is embodied in the first two themes of our IT strategy and resultant SIPs program, which focuses on simplified and innovative customer touch points supported by agile and efficient banking platforms and product systems.


As for customer touch points, we are modernising our sales and service desktops for our branches and call centres and implementing a new internet banking platform that will service retail, business and corporate customers.  These platforms will be used across all of our brands.


As for our banking platforms and product systems, we will tend to leverage and modernise the excellent capabilities we already have within the group, adding new technologies as required – for example, a common workflow engine.  In particular, we plan to leverage St. George’s Hogan platform for term deposits, transactions and savings products across all retail brands. We agree that real-time banking systems are important and are fortunate that we already have this capability in the Hogan platform.


We are also focused on improving the quality of customer information. This is a critical factor in ensuring we have customers who are delighted by their Westpac service experience, whether through staff assisted channels, such as branch and call centres, or our self-service channels, including ATM and online.


Jahangiri: From an IT perspective, what do you see as the ‘next big thing’ in financial services in 2010/2011?


McKinnon: There is never just ‘one’ next big thing in our industry. It is just too dynamic and broad.  The financial services sector tends to follow rather than lead when it comes to the use of new technology and innovate in the way these technologies can be applied on a larger scale. 


Virtualisation and cloud computing are evolving rapidly with new technologies challenging industry norms in the virtualisation of mid-range environments.  As heavy users of mid-range infrastructure, the productivity benefits of adopting these technologies on a large scale are obviously of great interest to us.


Like the rest of the sector, we are keeping a watchful eye on new mobile devices and channels like the iPhone and the iPad.  The iPhone is already the predominant device in our rapidly growing mobile channel.  We are also looking at next generation improvements in our online capabilities to offer customers more choice in the way they interact with us. We will continue to focus on innovation as it relates to our channels as we move towards providing a truly multi-channel experience where customers can start a transaction in one channel and complete it in another, all in real time.


Jahangiri: What are your top priorities for the year ahead?


McKinnon: My key priorities for the year ahead all relate to delivery on the business strategy in one way or another. High on the list is ensuring the ongoing security and reliability of our technology environments on a day-to-day basis as this is an essential part of delivering on our customer-centric strategy.


I am also focused on the delivery of our SIPs programs as these are vital part of enhancing our customer experience, improving productivity and reducing risk. 


Given that a number of our important sourcing relationships are nearing end of contract, the renewal of these relationships is also a high priority this year.


Lastly, our overall plans are ambitious and require great people working in a “one-team” culture to deliver them.  The building and development of this team has always been, and remains, my highest priority.


Jahangiri: How far in advance do you plan your group’s technology strategy and how do you ensure such plans are agile enough to respond to market changes?


McKinnon: The IT strategy developed in 2009 had a seven-year horizon. While a number of capabilities centred around the shorter-term merger priorities, most of the strategy is about building longer term capabilities to support our customer centric multi-brand business strategy.


Each year the business revisits its strategy to ensure it is responding to market forces and invariably makes subtle changes to its priorities and focus. Once the changes are clear, we revisit and refresh the IT strategy to ensure it remains aligned with the business, both in the short- and longer terms.


Jahangiri:  Where do you draw inspiration from to keep abreast of the technology curve?


McKinnon: Primarily I do this through my team and spending time with experts at all levels in the organisation.  I also learn a lot from our major partners and suppliers.


Over the last 18 months we have been strengthening capabilities in technology engineering and security.  Our teams in these two areas have deep domain knowledge and I always enjoy learning from them as they are so enthusiastic about new trends in technology.


Jahangiri: Given your past role as CEO of Multiplex, what is the best advice you can give to IT executives pitching a project to the CEO?


McKinnon: First, understand how your project will address a real business need and how it is aligned to business strategy.  CEOs don’t like a solution that is looking for a problem to solve.


Be transparent around the finances of the project and understand all the benefits, not just the costs. Make clear recommendations to your CEO, demonstrating that you have thought through the options and can justify the position you are recommending.


Jahangiri: Every IT leader has a legacy they wish to be remembered for. What is yours?


McKinnon: Throughout my career I have always focused on surrounding myself with the very best people and “basking in their reflected glory”.


The approach I have taken to my role at Westpac has been no different and I would like to be remembered for building a great team that is able to endure and succeed long after I am gone.