Australia’s financial sector's top technology echelon is undergoing a once-in-a generation churn just as the big banks prepare for the next battle in the digital war for supremacy.
The Commonwealth Bank, NAB, ANZ, Westpac, Suncorp and Credit Union Australia (CUA) have in the past six months replaced, or are in the process of replacing, their tech chiefs.
Superstar chief information officers such as Michael Harte, Clive Whincup and Jeff Smith were at the forefront of transformation projects and the shift to online and mobile banking. The challenges the new generation of leaders wrangle will be quite different.
Deloitte Technology managing partner Robert Hillard said that until about seven years ago IT was an enabler of the back office, for banks, adding that ''the last time we had a changeover in CIOs they all had platform issues. This time there are very different objectives.''
While the previous generation of technology leaders had implemented important new banking platforms, it was now up to the incoming crop to take a more experimental approach as they shape the future of banking.
''We don’t know what the bank of the future looks like,'' Hillard said.
While traditionally CIOs had to provide reliable, cost-efficient technology to meet known business demands, today’s pace of change mean CIOs need to take a portfolio approach – testing multiple innovations rather than placing a ''small number of big bets''.
The banks should benefit from new appointments' experience outside the sector, he said noting their environment is changing, with the rise of everything from new payments platforms, peer-to-peer lending to non-sovereign currencies such as bitcoin.
The technology disruption could be amplified by consumers seeking cheaper services. Hillard noted that while Australians had been prepared to pay premium prices for banking products in the past, they may now be prepared to accept a digital alternative at a lower cost.
Besides readying their institutions for change, Hillard said that the incoming technology leaders also needed to act as advisers to the wider economy.
Reserve Bank CIO Sarv Girn, formerly Westpac’s chief technology officer is already stepping up to the plate, speaking this month at a Committee for Economic Development of Australia meeting about digital disruption and the need for all sectors, including banks, to prepare.
''Digital disruption offers a fundamentally better alternative for solving a customer problem, in a cheaper, quicker and more convenient manner with technology playing a key enabling role. It is not evolutionary change, but radical in the way it changes businesses and societies.
''As an executive, the way you deal with digital disruption is more critical now than ever before; do you see it as a risky threat or an innovation opportunity, and what questions must you ask to ensure you don't become extinct? Surviving with a status quo mindset may not be enough when challenger business models are thriving in this digital age.''
Girn said embracing disruption meant embedding it into the DNA of the organisation, ''especially the culture which can lead to the adoption or shelving of new ideas''.
It is an issue that resonates for CUA chief executive Chris Whitehead, who has restructured and done away with the CIO role, instead installing Sue Coulter as general manager of business transformation and technology.
''We are in the digital business and the changes will be as dramatic as they have been in media, music or retail. If your strategy is to be a rapid follower you’re not likely to be a success.''
He said that while David Gee, the former CUA CIO, had overseen a technology overhaul, that was a ''once-in-20-year effort''.
''You have to see this as an ongoing transformation,'' said Whitehead.
While the incoming tech talent has its work cut out, it will be standing on the shoulders of a generation of CIOs who played important roles as iconoclasts and educators and convinced bank boards to spend billions of dollars to update decades-old legacy systems.
Michael Harte, for example, led the charge for core systems revamps, completing the CBA’s $1.1 billion core overhaul to a new SAP platform and convincing the bank also to pay for hundreds of IT staff to attend MIT courses in order to lift the the IT team's capabilities. He'll be replaced by David Whiteing, previously with BP and Accenture.
Jeff Smith, of Suncorp, meanwhile established the Agile Academy to train his team, in the process becoming a poster-boy for the Agile software development movement in Australia. He'll be replaced by Matt Pancino, previously with Perpetual and Telstra.
NAB's Denis McGee's replacement is David Boyle, from Ernst & Young. A search is under way for replacements for Westpac's Clive Whincup and ANZ's Anne Weatherston.