Of Special Interest

3rd June 2011

Major systems issues reported at ANZ

The Australian newspaper gives details of an internal report into the ANZ Banking systems. This found the ageing systems created operational risk, were detrimental to business generation and there were data validity issues.

The problems and "shambolic nature of the organisation's IT systems" were blamed on a long term failure of management to invest in the infrastructure. The report suggests the systems cannot meet regulatory requirements and that "Data is inaccurate and unreliable and manual intervention is required from source,". A specific issues highlighted given the bank's recent international expansion is the inability to calculate off-balance sheet exposures, such as in foreign held minority stakes. Off-Balance sheet exposures were a key problem during the financial crisis and rules will come into force under Basel III significantly tightening reporting rules. Another claim is that key financial accounts are managed by Excel spreadsheets with the risk of error and lack of control this involves.

The bank is an Oracle house, said to be one of the largest Oracle customers in Australia. The bank downplayed without directly denying the facts quoted stating that systems would have to be upgraded "as we evolve from a mainly domestic bank to a super-regional bank with significant operations in 32 countries". Yet it is claimed that a recommendation made over six months ago to spend lass than A$10m on new Oracle products is still under consideration with no decision made. A separate source suggested that some inside ANZ wanted to buy SAP product in favour of more from Oracle.