Westpac taps 10x to build new IT system for institutional bank
The plan is to eventually have 10x managing all of Westpac’s institutional bank accounts. Westpac will ultimately determine whether 10x could replace mainstream retail banking systems, but any decision on that is on track.
Westpac Institutional Bank chief executive Anthony Miller said initial services that could be improved with the new system were cash management, cash flow forecasting and real-time payment processing.
Large banks have typically offered to manage large customer cash using off-the-shelf software from companies like SAP. Westpac is keen to create its own data-driven tools and bring services to real-time.
To help large corporations manage their cash flow, 10x and Westpac, and potentially other partners, will develop artificial intelligence tools that will be offered to corporate treasurers to help them monitor funding, foreign exchange or supply chains using big data.
In the area of payments, 10x will help Westpac connect its services directly to customers’ accounts receivable and accounts payable software systems. This will allow large customers to process payments in their own IT environments.
Westpac also wants to ensure that institutional customers can use new and emerging payment rails, including those using blockchain technology. These are starting to appear in the foreign exchange markets and are being developed by global banks such as Singapore’s DBS, JPMorgan and Citi, and Westpac is keen to ensure that its institutional clients can use the new financial infrastructure.
“We have reinvented the new capabilities that our institutional clients need. With 10x, we’re going to create something very new,” said Westpac CTO David Walker. “We will gradually integrate new and existing customers into the new system. »
Westpac uses 10x to provide white label banking services to customers like Afterpay, SocietyOne and Flare. So-called banking as a service is enabling technology companies like these to create new distribution models for financial services.
JPMorgan is using 10x to power its new Chase retail banking offering in the UK. His extension of the Westpac relationship comes after Mr Jenkins visited Australia in March.
During this trip, he told The Australian Financial Review that banks will become “increasingly customer-centric if they can deploy modern cloud-native technology rather than generations of legacy hardware that most banks use.”
“It’s a trend in the industry. Our technology enables different types of banking relationships to come to market in ways that weren’t possible before and enables financial institutions to connect with customer bases that they couldn’t easily access,” a- he declared.
The 10x relationship is not exclusive to Westpac. Mr Jenkins said he had met other banks on his trip to Australia who had taken an interest in his systems.
“What fintechs have shown is that if you create a new user experience, customers will change their business,” he said.
Mr. Miller said 10x would help Westpac “improve productivity and profitability while simplifying processes and making it easier for our customers to do business with us.”
Unlike technology projects of yore, Westpac does not attribute exorbitant cost to building the service. Funding will come as part of its existing IT capital budgets. Last week, Westpac said that in the first half of its fiscal year it spent $141 million on growth programs, compared to $184 million in the first half of 2021.