eTransforming ANZ

1. eTransforming ANZ David BoylesHead of Technology, e-Commerce and Payments18 July 2000

2. eBank with a human face Provide our customers with a personalised, multichannel experience through seamless channel integration, web enablement and CRM technology: • Robust and flexible infrastructure. Rationalise core systems & platforms, standardise desktops and services, and create a single IP network • eCommerce capabilities. Build strong capabilities via eCommerce centre of excellence, ANZ Ventures discipline, and changing the way Business Units and IT work together • Cost reduction. Aggressively reduce costs by using technology to improve productivity, reduce complexity, straight-through processing & automation of administrative functions.

3. Automated, seamless Straight-through Processing Single IP Network Customer Management Better Service Lower Costs Technology vision Customers Web enabled Channels Standard Platforms

4. Hogan CBS Apple Novell UNIX UNIX OS/2 W2000 S/1 S/38 Storage T ek Disk Array Controller Storage T ek Disk Array Disk Array ICEBERG ICEBERG ICEBERG VAX AS/400 Storage T ek Disk Storage T ek Disk Array Disk Array ICEBERG ICEBERG MVS TANDEM MVS Infrastructure: Application & platform rationalisation 1998 2000 Hogan, EDS, T&C, BankMaster Core Systems 6 majorsystems 1998 2001 Platforms Business Outcomes • Simpler systems and platforms reduce cycle times: more flexible/adaptable • Benefits from infrastructure: NZ internet banking in 10 weeks • Greater ability to leverage new economy technologies: Win2000 & Unix • Lower hardware, software licence fees and support costs

5. OS/2 Win 3.1 Win NT Dos Infrastructure: Standardised servers and desktops 1998 2000 • All PCs running Windows NT or Windows 2000 • Office 2000 • Microsoft strategic alliance • Multiple hardware platforms • Win 3.1, Win NT, Dos, OS/2 • Different office applications Business Outcomes • Provides all staff the best tools possible, including Office 2000, via the intranet • Low cost of ownership through a standard solution - enables central upgrades, • reduced maintenance costs • Key alliances will underpin leadership capabilities in business applications

6. Infrastructure: Industrial strength web Web farms • Windows based web farm approach across ANZ • World class technical design and systems management capability • Standardised approach and repeatable build capability • Dedicated and focused technical team Business Outcomes • Robust, scaled industrial strength web infrastructure • High security standards including firewalls, encryption capability and certificates • Fast to build and low cost to maintain • Single site failover and second site DRP

7. Single IP Network Infrastructure: Single IP network 1998 2000 Multiple data networks A single IP Network provides universal connectivity, both internal and external 1999: CBD administration offices and large branches converted 2000: All sites converted Business Outcomes • Cost neutral, but 100 times capability increase: response time halved • Flexibility - support ‘any to any’ connectivity • Intranet access supporting improved knowledge of all staff • Industry standard: facilitates connections to external partners to support large • scale e-business development

8. Infrastructure: Payments transformation Today Tomorrow FTS MIDANZ (payments) MIDS/MERVA Braid Telex/Fax CARS (recl’n) MTS Telex Intelitracs Telex Intelitracs Finet(payments) Recon Inward Drawings Global Payments STI/ALA MIDANZ (payments) MMSI / SEARCH EFS, DEMS, CARS Venus STI/ALA MIDANZ (payments, reconl’n) MMSI / SEARCH Fundtech CARS • New technology Global Payments system retires 27 existing systems • Processes $90 billion a day worldwide • Australian implementation from 4Q 2000 Business Outcomes • Provides infrastructure for other payment initiatives including integration with eCommerce and Global Cash Management • Enables greater efficiencies through consolidation, real time capabilities and increasing Straight Through Processing • Provides agility and flexibility in new product delivery

9. Capability:Centres of excellence Example1 eCommerce Centre of Excellence • Standard Practices: • Architecture • Processes • Development • Testing • Component re-use • User authentication • Platform • Standard platforms and tools • Systems Monitoring • Operating systems • Security Personal Business Units Corporate Joint Solutions Teams International • Business Outcomes • Solutions that meet Business Unit requirements • Cost effectiveness - standard practises, leveraging ANZIT • Timeliness to market - Rapid Application Development, 30 day cycle, but 3-7 days on many projects, e-auto - concept to full business launch 6 months

10. Capability: Transforming the culture Development and training: - leadership development - specialist career paths - on-line training • Large (2-3 yr) project focus • Platform /technology focus • Technology as a necessary cost • IT as a specialist support function • Technical skills paramount • People as expensive commodity From To • Rapid development, 30-90 day cycles • Business benefits approach • Technology as business fundamental • IT/ Business Unit joint planning • Leadership and customer orientation • People as valuable investment • Empowering people to initiate improvement: Triple A program delivering $19m benefits to date

11. Business Units Capability: Centres of ExcellenceExample 2 Business Alignment ANZ Ventures • Established late 1999 • Small expert team supporting all businesses • Utilising rigorous processes • Following strict guidelines around strategic fit Investment Committee EMC Investment Decision and Governance ANZ Ventures Business Outcomes • 180+ opportunities processed • 6 deals concluded • 66 in the pipeline Opportunity identification, synergistic outcomes, return on equity Opportunity analysis, Deal Execution and Support

12. Capability: Trust and authentication • Identrus • ANZ is currently the only Australian bank to have an equity investment in Identrus. • Identrus has a number of distinguished members from the banking industry. • Building the foundations for a Global Trust and Authentication Services infrastructure to take a leading role in B2B, B2C, B2G, B2E and Payments. • ANZ/Partner IP • Based around digital certificates and Smart Card technologies • Key inititiatives and investments • Security and Access System • Identrus • ANZ Telstra /ERG JV • Other investments and strategic relationships

13. Web-enabling ANZ Sales & Service Platform B2C AST Real Time Loan Approvals B2B Internal ERP VIPS Directors on line

14. Costs: High quality low cost solutions Already delivered: • Reduced dependence on expensive contractors • Co-located IT executives with business managers • Increased staff numbers in lower cost high quality environments • Introducing new quality and efficiency programs across all development sites: • electronic time cards and project management • implemented CMM pilot in the International Unit for roll out across ANZ • Delivered training on-line Business Outcomes • CMM pilot has reduced coding cost by 24% and errors by 90% • Quicker problem definition and solution • Staff turnover dropped from 18% May 1998 to 7% May 2000

15. Costs: Payments voucher imaging project Purpose built - discrete configurations Win 2000 and web based Replace voucher processing equipment with PC based image capture technology Scalability - ability to scale solution to suit individual sites Flexibility - any number of sites of any size Proof of Concept completed. Progressive testing 2000. Australian rollout commences 2001 Business Outcomes • Low cost/greater capability • Competitive advantage through flexible scalability and Lockbox integration • Enables transformation of customer service activities and customer “self service” • Maintains ANZ at ‘best practice’ in Australia

16. Costs: Straight through processingExample 1 Esanda: Loans, Leases and Cash Investments Internet Web Servers Application Servers Middleware Backend Customers Internet Service Provider A B Virtual Private Network Dealers Brokers C ANZ Network Sales Team Intranet D Support Staff W2000 W2000 Unix Head Office Common entry point for all channels One user interface Proof of Concept Complete. Implementation Scheduled Q2 2001 Business Outcomes • Low cost delivery via straight through processing, designed for Fault Tolerance, High Availability, Scalability and Performance, easily integrated and deployed. • Responsive to changing business needs - designed for ‘plug and play’ • Highly Secure, protected by Firewalls and a Security Policy Service. • Leading edge use of Microsoft solutions

17. Costs: Straight Through ProcessingExample 2 Personal Banking Loan Origination System Internet Middleware Customers Backend Web Servers Application Servers Internet Service Provider ANZ’s Core A/C Processing System Mortgage Managers Credit Bureau ANZ Network ANZ Branch Network Intranet MIS Packaged Solution Packaged Solution IBM M/frame Back-office Operations First implementation for Mortgage products scheduled 2000 Business Outcomes • Faster response to customers, and web-based access to origination processes • Common, automated end-to-end processes for all products and channels • Electronic workflow of remaining manual processes • Significant productivity improvements - reduced reworks

18. Costs: Delivering Via the Web Internally: October 1999 Today End 2000 Post 2001 Informational Transactional Dynamic E-business Evolved from IT pilot, text primarily General/ Access MAX reaches 14,000 staff Max reaches 20,000 staff All staff Basic publishing Publishing tools - 100 staff trained PFS manuals on-line Publishing tools - 200+ staff trained All Manuals on-line On-line manuals supported by document management Publishing 160 forms on-line; incl. Leave online 1000 Forms Common processes automated 400 Forms on-line Workflow tools in place E-Forms Training On-line training - stage 1 On-line training - stage 2 Vendor selected Knowledge Management Strategy & pilots Institutionalise Extend pilots across Business Units Multi Media Limited Functionality 7,000 access 10,000 access Business Outcomes • “Max” has become medium of use • Costs reduced via move to paperless office • Increased effectiveness through keeping staff better informed • Improve administration processes for staff via the web

19. eBank with a human face Provide our customers with a personalised, multichannel experience through seamless channel integration, web enablement and CRM technology: • Robust and flexible infrastructure. Rationalise core systems & platforms, standardise desktops and services, and create a single IP network • eCommerce capabilities. Build strong capabilities via eCommerce centre of excellence, ANZ Ventures discipline, and changing the way Business Units and IT work together • Cost reduction. Aggressively reduce costs by using technology to improve productivity, reduce complexity, straight-through processing & automation of administrative functions.