Westpac Banking Corporation, Australia's third-largest discount broker, is looking to outsource its back office processing to JDV, a division of HP JDV Limited, an Australian investment banking, technology and outsourcing company.
Although, all customer contact activities will remain with Westpac broking, the bank is considering outsourcing settlements, sponsorship, corporate actions and account administration functions.
Tim Moore, CEO of HP JDV, says that through the JDV platform, the bank can expect to benefit from economies of scale and stay at the forefront of technology. Other clients of JDV include AMP, Suncorp Metway, Macquarie Financial Services Group and Charles Schwab.
"The JDV platform has been fully STP [straight-through-processing] enabled since 1999 and STP-accredited," Moore says. Current settlement and clearing time for brokerage trading in Australia is currently three days.
Westpac Financial Services managing director Shaun Mays adds, "This initiative should allow Westpac Broking to take advantage of the very latest software and technology in the market for its back office activity, including straight-through processing, as well as obtaining further scale benefits."
Neither JDV or Westpac were able to disclose the cost savings of outsourcing the the brokerage's back-office system, but Moore says that "over the expected term of the contract, the savings will be substantial".
"This move is in line with Westpac's strategy to focus on those areas where it can create better value for customers," says Mays of the project's objective. Although the project is well underway according to Moore, Westpac will make a final decision on the feasibility of outsourcing in September. Moore says that issues on hardware, software and integration still have to resolved.