E-business atwww.westpac.com.au

Jerry Gross, Group Executive I.T. and e-Business

March 2001

DisclaimerDisclaimerThe material contained in the following presentation isintended to be general background informationon Westpac Banking Corporation and its activitiesas at 22 March 2001.

The information is supplied in summary form and istherefore not necessarily complete. Also, it is not intendedthat it be relied upon as advice to investors or potentialinvestors, who should consider seeking independentprofessional advice depending upon their specificinvestment objectives, financial situation or particular needs.

Strategic IntentStrategic Intent

CustomerIntimacy

OperationalExcellence

ProductInnovation

1999/2000Focus

Strategic IntentStrategic Intent

CustomerIntimacy

OperationalExcellence

ProductInnovation

2001Focus

Strategic IntentStrategic Intent

CustomerIntimacy

OperationalExcellence

ProductInnovation

Westpac FocusWestpac Focus

Fully IntegratedManufacturer/Distributor

• Individual product view of eachcustomer, fragmented acrossmultiple contact points

• Mass market orientation (limitedcustomisation)

• Relatively narrow product range,mainly manufactured in-house

• Old economy, in-house, resourceintensive focus

Trusted Retailerof Financial Solutions

• Integrated customerunderstanding, independent ofcontact point

• Creating individual financialsolutions

• Broad product rangeaggregated across suppliers

• Multi-channel delivery platform

E-Commerce MythsE-Commerce Myths

NEW LESSONS• Distance Learning vs. Universities• PDA’s vs. Laptops• Careers.com vs. headhunters• e-Tailers vs. Malls• Online players vs. Brick and Mortar players• Call Centres vs. web-based support

New Assumptions in SellingNew Assumptions in Selling

The death of the transaction• the rise of the relationship

The death of the passive consumer• the rise of active co-creator

The death of opaqueness• the rise of transparency

The death of the product• the rise of experience

The New Exchange ArchitectureThe New Exchange Architecture

- Marketer-initiated- Marketer-controlled- Monologue- One-time

- Customer-initiated- Customer-controlled- Conversation- Ongoing

Industrial AgeIndustrial Age Information AgeInformation Age

Banks’ competitive advantageBanks’ competitive advantage

Buyer Value ChainRequest for information /

purchase enquiry

Assess pricing, service levels, quality

Place order for goods

Receive invoice / goods

Pay for goods

Seller Value Chain

Supply product information, respond to information

requests

Price goods & services

Fulfil orders

Ship goods and

invoice buyer

Receive payments for

goods and services

BANK

BANK

Increasing need for Trust Payments System$

Banks’ competitive advantageBanks’ competitive advantage

• Our legacy is also an advantage:

- Already playing a key role in facilitatingcommerce

- Large distribution networks

• Position of trust

• Large online community across the fullspectrum of customers

Westpac BeliefsWestpac Beliefs

• "Clicks and Bricks" is the ultimate offensive play

• Focus on "Outside In”

• Superior execution

• Self-serve mass customisation

• Straight through processing

• New business models

• Build to change, not build to last

• All Commerce is e-Commerce

• Alliance Culture

Should we, or someone else do it?Should we, or someone else do it?

StrategicImportance

SustainableProfitability

AvailableOpportunities

PortfolioStrategies

NETWORK

HARDWARE

OPERATING SYSTEM

MESSAGING

MIDDLEWARE

OBJECTS

GUI

Robust Robust largelargescale scale managementmanagement

Focusing on Customer Rich ComponentsFocusing on Customer Rich Components

Rapid ExecutionRapid ExecutionClose to the CustomerClose to the Customer

Stay-in-businessinitiatives

(evolutionary, incremental)

Destroy-your-business initiatives

(revolutionary, discontinuous)

Duality in eBusiness initiativesDuality in eBusiness initiatives

eBusiness

Differencesscopespeed

fundingpeople

incentives

HighHighPotential Buyer Value

Capture

LowLow

IT E

nab

led

Tra

nsf

orm

atio

n

HighHigh

LowLow

TransformationTransformation(New Value Propositions)(New Value Propositions)EvolveEvolve

Competitive PositionCompetitive Position(Enhanced Revenues (Enhanced Revenues

and relationships)and relationships)ExtendExtend

Investment OptionsInvestment Options

EnhanceEnhanceEfficiencyEfficiency

(Cost Savings)(Cost Savings)

EffectivenessEffectiveness(Reduced time, (Reduced time,

improved process quality)improved process quality)

Venture AccelerationVenture Acceleration

PartnershipManagementTeam

Ability to CreateValue

Track Record

Focused Strategy

What progress have we made...What progress have we made...

• Launch of New Zealand Internet Banking service• Launch of f2 Domain home lending partnership• Launch of Healthpay health insurance payroll contributions service• Launch of SME Superannuation contribution service• Launch of Westpac Broking• Launch of Business Internet Banking service• Launch of third party payments capability for business and consumer

customers• Launch of yieldbroker.com fixed interest trading portal• Launch of e-Bonds distribution capability• Launch of FX Online foreign exchange trading capability• Launch of On-line Research service• Launch of Nostro / AUD online institutional accounts service• Redesign and re-Launch of westpac.com.au site• Establishment of Metiom Australasia JV to provide eProcurement and

B2B Marketplace services

Key capabilities launched in the last year

The End Game?The End Game?

• Execution will be the determinant

• Capture and exploit ideas

• Partner for targeted ASP offerings

• New customer relationship

• Proactively offer new services

• “Open” marketplaces

• Comparing to best practices in anyindustry

Jerry Grossjgross@westpac.com.au