Shared banking cloud possible, not practical: Westpac CIO

Pooling infrastructure and applications into a common public cloud for Australia’s banks is not a far-fetched idea, but the practicality of getting all parties to agree will prevent its reality, according to the head of IT at Westpac bank.

Westpac CIO group executive, Bob McKinnon, pondered the idea of a shared banking cloud and said it has even been attempted by at least one IT vendor already.

“We have the crazy situation where all banks run mortgage platforms and there is no competitive advantage in that software,” McKinnon said.

“Yes, there are areas where a shared cloud will work, but there are other areas where [banks] will want to stamp own brand and label on things.”

Speaking at a cloud panel discussion forum in Sydney hosted by law firm Gilbert + Tobin, McKinnon – who has held past roles as CFO at Multiplex and CIO of the Commonwealth Bank – said tech giant HP attempted to build a shared cloud for banking services but there is still only one participant – Westpac.

“The industry must be prepared to do it more as many technologies don’t add to competitive advantage,” he said.

While a public bank cloud is possible and even desirable, don’t expect much cooperation anytime soon, said Commonwealth Bank of Australia (CBA) CIO, Michael Harte.

“Will the Commonwealth Bank sell its SAP system to Westpac? We certainly would sell it and Bob should buy it,” Harte said jovially.

“If we can create switching in an agile way we may manufacture systems other banks can use.”

Harte cited the ViPro cheque processing joint venture as an example of existing cooperation between the banks.

“There is the use of ViPro for cheque processing which will hopefully soon be a thing of the past,” he said. “There’s no point in using cheques [anymore], but people like them.”

A shared cloud may lead to more transparency between the banks, Harte said, and should help people make the choice between them so “portability could be improved”.