Part 1 Problem2 1.1 Definition, definition of the problem 2 and considerations 4 1.5 Liming considerations 4 1.5 Timing considerations 4 1.5 Importance of the delivery of the benefits to Government 4

COMMBANK
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STRATEGIC ASSESSMENT

Contents
Executive summary 1
Part 1 Problem.............................................................................................................................2
1.1 Background..............................................................................................................2
1.2 Definition of the problem........................................................................................2
1.3 Evidence of the problem........................................................................................2
1.4 Timing considerations............................................................................................4
1.5 Consideration of the broader context.....................................................................4
2. Part 2 Benefits........................................................................................................4
2.1 Benefits to be delivered..........................................................................................4
2.2 Importance of the benefits to Government.............................................................4
2.3 Evidence of the benefit delivery.............................................................................4
2.4 Interdependencies...................................................................................................4
3. Part 3 Strategic response........................................................................................5
3.1 Method and criteria................................................................................................5
3.2 Strategic option analysis.........................................................................................5
3.3 Recommended strategic option..............................................................................5
4 Part 4 Project options analysis...............................................................................6
4.1 Project options considered.....................................................................................6
4.2 Stakeholder identification and consultation...........................................................6
4.3 Social impacts........................................................................................................6
4.4 Environmental impacts...........................................................................................7
4.5 Economic impacts..................................................................................................7
4.6 Overall evaluation of socio-economic and environmental impacts.......................7
4.7 Financial analysis...................................................................................................7
4.8 Risk comparison.....................................................................................................8
4.9 Integrated analysis and options ranking.................................................................8
5 Part 5: Deliverability of recommended solution....................................................8
5.1 Details of recommended solution...........................................................................9
5.2 Commercial and financial......................................................................................9
5.2.4 Funding sources.......................................................................................12
5.3 Management.........................................................................................................12
5.4 Delivery................................................................................................................13
Appendix 1: Benefit management Plan 14
Appendix B: Sign-off checklist 15
References....................................................................................................................16
Appendix D: Project management strategy.................................................................18
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Executive summary
This business case is purposed to get formal approval for investing $50 million in 2019 to
2021. Decision makers are requested to consider the low profit that CommBank has registered
since the data scandal that came from outsourcing some operations dealing with delicate
customer data. The proposal is in agreement with the government policy of addressing
cybercrime and minimising losses incurred by banks from the same. The different options that
are available for the project are hiring professionals on permanent basis and creation of staff
awareness on the dangers of cybercrime. This project can be successfully completed within
three years with minimal cost. The cost that will be incurred will be realized as increased
profit in the first one year into implementation.
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Part 1 Problem
The world has witnessed many cases of cybercrime. These crimes have the potential
to collapse the banking industry and see businesses run bankrupt. Cybercrime is an
ongoing problem that financial institutions must learn to prevent. Sensitive customer
data and finances are at risk and vulnerable if any bank does not take adequate
proactive measures. Over-reliance on third parties to provide services in CommBank
has cost the bank billions of dollars. Fuji-Xerox was contracted to destroy some
magnetic tapes that contained sensitive customer information and that was the cause
of the problem. It is very critical to be careful when contracting third parties to handle
customer related data since their interests may not rhyme with the interests of the
institution. CommBank has not stopped hiring third parties to perform some of the
tasks required to be performed in the bank. Due to the benefits of outsourcing
(Varajão, Cruz-Cunha, & Da Glória Fraga, 2017), the bank finds it cheaper to
outsource services instead of hiring the professionals who perform some of the
sensitive tasks. This poses threats t the customers and more customers will be
refraining from banking in banks they are not confident of the security of their data.
The Australian banking industry has not been spared and specifically, CommBank.
1.1 Background
There has been an escalation in the rate of data breaches and data crime (Burlakov,
2019; Malik and Islam, 2019). Financial institutions are bearing the brunt of the
attacks in terms of millions of dollars’ loss per year. The advent of technology has
birthed many of the problems the world is battling today. Although not all technology
is disruptive (Christensen, 1997), there is an urgent need to address the issue before it
ruins the future of financial institutions.
1.2 Definition of the problem
CommBank has been providing financial services for a long time. Due to the
experience that the bank has, it would be expected that the bank can easily address the
challenges that threaten it. However, this is a fast-paced industry where things change
at a high speed. Data breaches and data crime are a continual threat to CommBank.
For instance, last year (2018) saw a high quantity of data that span 15 years lost form
the bank. This backup data was on customer accounts where over 20 million accounts
were affected. The data loss was attributed to cybercrime. As a result of the data loss,
customers and potential customers were bound to have a negative perception of the
bank and this saw a decline in income in the first quarter of 2019. The bank posted a
profit of $4.7 billion, much less than what was expected (Freeman, 2019).
1.3 Evidence of the problem
Customers are getting more concerned with their privacy due to the level of
cybercrimes in the world. This has seen some significant decline in the overall
financial performance for the bank over the last couple of months. Figure 1 shows the
financial performance for the period spanning from January 2018 to January 2019.
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Source: https://www.google.com/url?
sa=i&source=images&cd=&ved=2ahUKEwjB0KrggLziAhU68uAKHaFnDPIQjRx6
BAgBEAU&url=https%3A%2F%2Fwww.netcials.com%2Fstock-performance-
current-year-australia%2FCBA-COMMONWEALTH-BANK-OF-AUSTRALIA
%2F&psig=AOvVaw0UBxZgLzeeCLg6-MvB5Zaa&ust=1559054933996958
Figure 1.1: Financial Performance for CommBank
From figure 1, it is clearly evident that the financial performance drastically dropped
in March 2018. This is the same time that the scandal of data loss came into the
public as mentioned earlier. Evidently, there is a connection between the data loss and
the dismal performance. There may be other factors that could have contributed to the
poor performance of the bank but it is unlikely that this could coincide with the
sandal.
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1.4 Timing considerations
Reduced customer confidence will see CommBank continue performing dismally. If
the problem is not solved urgently, there may be more incidences of cybercrime that
are waiting. An increase in such incidences will ultimately discourage customers and
erode any confidence in the bank. This may finally lead to the collapse of the bank.
1.5 Consideration of the broader context
Cybercrime is expected to cause ripples in the banking sector. All banking institutions
are expected to suffer some form of loss in connection to cybercrime. The problems
are not limited to CommBank alone and addressing the problem in a comprehensive
manner would be beneficial to the entire industry. There is a need for all stakeholders
to marshal their strength together and address the issue before it brings the sector to
its knees.
2. Part 2 Benefits
2.1 Benefits to be delivered
This project is aimed at improving value for CommBank customers. There has been
in an increased rate of cybercrime in CommBank, making customer data to be
vulnerable to attacks by fraudsters. When customers put their money in CommBank,
they want safety and interest on their savings. When this is addressed, customers will
not need to worry about losing their money when they have already accumulated it
and saved it for future use or investment.
2.2 Importance of the benefits to Government
Once cybercrime is addressed and eliminated in CommBank, there are several
stakeholders who will benefit. First, the government will be able to realize part of its
goals of trimming cybercrime so as to encourage investment in open banking. On the
other hand, CommBank will be one of the greatest beneficiaries since they stand to
make more profit by increased savings and transactions when customers have
confidence in the bank’s cyber security. On the other hand, the customers will also
benefit and in turn help in nation-building.
2.3 Evidence of the benefit delivery
The key performance indicators showing the status of the benefits will be the financial
performance of CommBank in the next three years. There needs to be an improved
financial performance that will be measured by the bank’s balance sheet. From the
balance sheet, it will be clear the amount of profit that was made over the year. Matt
Comyn, the Chief Executive Officer will be the person who is expected to facilitate
the realization of these benefits. As expected from the closure of many offline
branches as the bank focuses on online transactions, more transactions at a lower cost
are expected (Vercoe, 2019).
2.4 Interdependencies
Although cybercrime is an issue, it is not the only concern when forecasting the future
performance of CommBank. Introductions made by the new leader, Matt, like laying
off laborers to cut expenditure is a key thing. There is also a key role played by the
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