Westpac is understood to have launched an internal inquiry into the performance of its BT Panorama wealth management platform, amid suggestions it has been plagued with challenges and cost blowouts.
The bank introduced Panorama to its BT wealth management business about two years ago at what was thought to be at a cost of about $400m or $500m. However, well-informed sources believe costs have escalated to around $900m and many of the hoped-for benefits have not come to pass.
One benefit was thought to be that other platforms would be shut down and migrated to Panorama but it is understood migrating the platforms has not proved to be easy and only one out of about 10 in the wealth business have been shifted.
Westpac is believed to be looking at the Panorama project and ways for the platform to be enhanced. It is expected to be a trying situation for top executives within the bank, with chief executive Brian Hartzer said to be facing pressure to make major changes.
Hopes of gaining large margins from Panorama are also thought to have not come to pass.
A raft of senior staff changes have already been made at Westpac this year. Westpac in March announced the departure of BT Financial’s head Brad Cooper and Consumer Bank chief executive George Frazis, while this month chief financial officer Peter King announced his retirement. The departures in March came at the time of a restructure, which has seen BT Financial Group subsumed into the bank’s consumer and business bank.
Some analysts have questioned whether Westpac would keep its wealth management platform, although a sale is not thought to be on the agenda.
Earlier this year it exited its advice business but has so far bucked the trend when it comes to holding on to its wealth operations, with its three other major banking competitors all selling their wealth divisions.
The changes come at a time of greater scrutiny and compliance requirements on banks following the royal commission.
Meanwhile, investment bank JPMorgan is exploring options for Westpac with respect to its $1.5bn life insurance operation.
American International Group is understood to have been in prolonged talks with the bank about an acquisition.
However, the understanding is talks have ceased for now.
This comes as AIG recently embarked on a major restructure and after the departure of its global head of mergers and acquisitions, who was driving the planned acquisition.
The anticipation among some is that the sale of the life business could be deferred until more certainty exists surrounding the industry.
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