Chris Skinner's blog

Shaping the future of finance

ANZ don’t need to change core systems … yep and Father Christmas might visit too

Chris Skinner Author Avatar

Well I couldn’t let this one go by without commenting on it.  A regular theme in the blog is get rid of old technology if it’s running core systems.  The reason is that systems designed before Mark Zuckerberg was born are surely not fit for purpose in this day and age.  Well, the CIO of ANZ – a bank in Australasia – has just told me I’m wrong.

In a widely reported interview with the Australia Financial Review (AFR), Scott Collary says that there is no compelling reason to rip our and replace their 40-year old Hogan system, now managed and maintained by CSC Hogan.

So first, it may be worth a read of what the article actually says:

ANZ Bank rules out upgrading core IT systems, by Beverley Head

ANZ Banking Group chief information officer Scott Collary says there's still "no compelling business case" for the bank to invest $2 billion and spend five years performing a core IT systems overhaul.

Scott, ANZ

The comments from ANZ's CIO come despite competitors NAB and Commonwealth Bank heavily investing in improving their technology systems over the past few years.

While ANZ held meetings with its core platform supplier CSC late last month, Mr Collary said ANZ's platform was fairly modular and could support customer facing innovation. To prove this the bank previewed its Android-based mobile payments device, Blade II, last week. The device is set to launch later this year. ANZ is also the only major Australian bank to offer ApplePay.

"We are pretty satisfied with where we are. We look at every big project that comes up and every year we review the strategy," he said.

But Mr Collary's comments were at odds with the bank's chief operations officer, Alistair Currie, who acknowledged that the complexity of the bank's technology infrastructure was making its  digital transformation difficult – and that it's far from "digital nirvana". 

"We have a lot of internal complexity which makes our workforce job hard, makes change hard, makes driving customer experiences hard," he said, despite the bank investing $1.2 billion a year on its IT change programs.

While ANZ has so far opted not to embark on a wide-scale core systems upgrade, the other major banks have.

Commonwealth Bank was the first to complete its core systems overhaul to an SAP platform in 2012, Westpac should complete the upgrade of the Hogan platform to Celeriti around the end of the year, and NAB is undergoing a stage-by-stage rollout of Oracle's NextGen financial services platform.

Mr Currie said regulatory pressure was not the biggest barrier to innovation in banks, instead it was internal stakeholders.

"The hardest problem is moving the internal stakeholders along who are usually deeply invested in something they think is very successful," he told the Pegasystems' user conference in Las Vegas in June.

"We have around 2500 apps and software systems – many of them duplicates. [Meanwhile] one of our main core banking systems turned 40 this week. [But] whilst it's 40-years-old it works perfectly. Software doesn't decay as long as you've got the right people in support."

The legacy platforms will face fresh scrutiny from former Google Australia and New Zealand boss Maile Carnegie, who becomes ANZ's group executive for digital banking in late July. She reports directly to CEO Shayne Elliott and will partner Mr Currie and his team to drive more digital transformation.

Mr Currie said ANZ could not afford to "land the plane and stop".

"What we are doing is to decompose the full stack, upgrade the elements we need and must do, particularly integration to make it more flexible ... and in a sense isolate the remaining question about the core books and records to a single decision about the back end, having de-risked and removed the components around it. We're well into the journey."

He acknowledged that at some stage the bank's five separate core banking legacy systems would need replacing, costing billions of dollars – just not yet.

So that’s all well and good.  Digging around a little, I first found the announcement of Mr. Collary’s appointment which says:

Australian bank ANZ has appointed former Citigroup IT chief Scott Collary as CIO, following a seven-month search to replace the departed Anne Weatherston.

Collary previously held the role of Citigroup’s consumer CIO for North America since 2008, where was responsible for simplifying products and introducing a ‘digital first’ strategy. Prior to this he was senior vice president and retail CIO at regional US bank Fifth Third. He has also worked in a number of leadership roles at Bank of America in the past.

Collary will begin his role in early December [2014], reporting directly to ANZ group chief operating officer, Alistair Currie.

“We are pleased to have an executive of Scott’s calibre join ANZ. He brings with him a track record in leading large, global teams and driving a culture that is innovative and customer-centric,” said Currie.

“Scott has particular experience in leading large-scale digital technology programs and will have a key leadership role in continuing ANZ’s transformation to become the most compelling, most convenient and easiest bank to use for all customers." 

So he’s been in role 18 months and his predecessor was there for five years implementing a strategy to convert the bank to cloud. When that strategy (Towards 2017) was announced in 2011, Anne also asserted that their core systems were fine.

“We will continue to have three cores; our business strategy does not require us to replace or consolidate them. Our analysis of the strategy requirements of ANZ’s business has persuaded us that in the next immediate years we are not constrained by the capability of our core systems.”

Note she wasn’t saying they were fine long-term, just for the near term.

So, they know they have to change the core at some point, but the question is when?  Equally, how come Scott is saying it’s not an issue when his boss, Alistair, says it is.  Maybe the commentary on Ms. Weatherston’s departure says it all:

I believe Australia’s banking IT sector will view Weatherston’s tenure at ANZ Bank as something of a mixed bag.

There is no doubt that the executive is top-class global chief information officer. Weatherston’s visionary speech to a lunch of the Committee for the Economic Development of Australia in October 2011 certainly highlighted that fact and how deeply the executive understands the rapidly changing global banking industry from a technological perspective. Then too, from all indications the CIO has been able to successfully keep ANZ’s technology operations delivering to support the bank’s ‘super-regional’ Asian strategy.

ANZ Bank has been innovative from customer-facing and IT service delivery perspectives during Weatherson’s tenure. The CIO has pushed the envelope and deserves credit for this.

However, one also suspects that the executive has not been able to achieve the cut-through at the bank’s highest levels that other CIOs such as CommBank’s Michael Harte (now at Barclays) or Suncorp’s Jeff Smith (now CIO, IBM) have plainly been able to. Alone amongst Australia’s top four banks, ANZ still lacks a core banking rejuvenation strategy, and at times Weatherston has been overshadowed by business executives such as Currie or deputy chief executive Graham Hodges.

Few could forget the briefing Hodges and Weatherston held in July 2011 which was supposed to outline the bank’s technology strategy, but ended up delivering only vague hints of its roadmap. The contrast between this event and the all-singing, all-dancing technology roadshows put on by Harte at CBA could not be more stark; and the rapid advancements of CBA’s technology capabilities (especially its real-time banking abilities) shows how the bank’s investments in IT are strongly paying off.

Hmmm.  Seems to me that Scott is trying to paper over the cracks of the bank leadership teams’ lack of balls to fez up and deal with the issue.  In Banking Technology he is quoted as saying:

“The core bank platform and the product processors aren’t holding us back from doing anything … the only reason you would really change your core was if it was end of life from the vendor and you couldn’t get support any more; you couldn’t find people to work on it; it wouldn’t scale to the volumes that you needed or you couldn’t use it to integrate the rest of the platform and it would slow you down from rolling out new innovation.”


Westpac-owned St George Bank, Bank of Melbourne and BankSA suffered an internet banking outage last year and when the systems went live again, a major data corruption was discovered in the mainframe database, forcing Westpac to shut their services down for most of the day.  They use Hogan.  Another long-standing Hogan user in Australia, Suncorp, is on the replacement path too, and will also be using OBP instead of Hogan when the project is completed.

Equally, taking is statements one by one.  You only need to change the core if:

The core system is at the end of its life from the vendor and you couldn’t get support any more

CSC own Hogan support dating back to their acquisition of Continuum in 1996 (Continuum had brought Hogan in 1995).  CSC are very happy for their users to pay for the COBOL, JCL, CICS and other pre-internet era personnel.

The couldn’t find people to work on it

See last paragraph.

It wouldn’t scale to the volumes that you needed or you couldn’t use it to integrate the rest of the platform and it would slow you down from rolling out new innovation.”

Well it can scale because it runs on big old IBM mainframes; it can integrate because CSC and IBM work with you to do that; and it doesn’t slow down innovation because you enjoy sticking lipstick on a 40-year old pig.  They implemented this core system in 1976.  Just to repeat:

“One of our main core banking systems turned 40 this week. [But] whilst it's 40-years-old it works perfectly. Software doesn't decay as long as you've got the right people in support."

Really?  It doesn’t decay as long as you can find people who can still code COBOL, JCL, CICS and all that stuff yes?

So let’s put this in perspective.  1976 was the year the following events happened:

  • The Cray-1, the first commercially developed supercomputer, is released by Seymour Cray's Cray Research;
  • Apple Computer Company is formed by Steve Jobs and Steve Wozniak;
  • Microsoft is officially registered with the Office of the Secretary of the State of New Mexico;
  • The first commercial Concorde flight takes off;
  • Harold Wilson resigned as Prime Minister of the United Kingdom;
  • Ronald Reagan announces U;S; Senator Richard Schweiker as his vice presidential running mate;
  • Frampton Comes Alive! by Peter Frampton, is the best-selling album of the year;
  • The Ramones and the Sex Pistols released their first albums;
  • Bob Marley was shot dead; and
  • One Flew Over The Cuckoo’s Nest won Best Film at the Oscars

Oh, that last one sounds just about right.

ANZ core systems review


Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

Intelligent Money: Our Future Is Where We Do Not Think About Money, As Our Money Thinks For Us

What is the future?

Learn more

Learn more about Chris

About Chris Skinner

The Past, Present And Future Of Banking, Finance And Technology

Fintech expert Chris Skinner: countries need digital transformation to remain competitive

Join me on Linkedin

Follow Me on X!

Hire Chris Skinner for dinners, workshops and more

Learn directly from from one of the most influential people in technology, gain insights from the world's most innovative companies, and build a global network.

Chris’s latest book

Order now

Chris Skinner’s ‘Intelligent Money’ Book Launch Event

Top 50 Global Thought Leaders and Influencers on FinTech 2023

Chris Skinner
Commentator, CEO of The Finanser and best-selling author at The Finanser

Thinkers360 Thought Leader

Contact Me

Global Awards

Lifetime Achievement Award

Global 100 - 2024 Winner

Chris Skinner - Financial Markets Advisor of the Year - The Finanser - UK 2023

Best Financial Markets Advisor of the Year 2023

30 Best Regtech Blogs and Websites 2023

Kids creating the future bank | TEDxAthens

Captain Cake and the Candy Crew

Captain Cake Winner of a Golden Mom’s Choice Award


Alex at the Financial Services

Gaping Void's Hugh MacLeod worked with the Finanser