Leading Online Bank Expands Investor Services

Westpac Banking Corporation didn't become an industry leader by resting on its laurels. Staying open to innovation keeps the company ahead of the competition. Westpac was recognized in 1999 by Australia's Personal Investor Magazine as Online Bank of the Year. In January 2000 the company furthered its industry-leading position by entering the retail stock arena with the launch of its new online discount trading service, "Westpac Broking."

Westpac Broking offers retail investors an alternative method to traditional brokerage firms for managing share trading and portfolios, providing substantially lower trading fees than full-service brokers. Retail customers use the phone or Internet to trade all Australian Stock Exchange (ASX) listed shares, access free company profiles and market information, and use portfolio reports to stay on top of their investments.

Stress Testing Crucial to Success

Testing the performance of Westpac Broking before going live to investors was crucial to the site's success. The system needed to withstand heavy trading periods with a high number of concurrent users. "This is a highly competitive, transparent business—if the system were to go down, the impact on our customers and our reputation would be tremendous," says Dorai Sundaram, senior IT manager. "Westpac Broking is offered as part of a total solution to our existing bank customers. Any downtime could potentially alienate customers valuable to other areas of the bank, impacting across every division of Westpac.

	"If the system were to go down, the impact on our customers and our reputation would be tremendous." —Dorai Sundaram, senior IT manager, Westpac Banking Corporation

"We needed to be absolutely confident that the system could not only perform at optimum levels during peak periods of trade, but that it could scale up with customer demand to handle more concurrent users," he says.

Compuware provided Westpac with its QALoad load testing tool under a Proof of Concept (POC) scheme. This allows companies piloting testing devices to ensure the tools meet strict criteria established by the potential customer. The goal at Westpac was to deliver a working solution within two days of testing—emulating both the quantity of trades and trading patterns.

"We needed to simulate appropriate load conditions, measure response times and compare them against acceptable levels," Sundaram says. "QALoad allowed us to simulate a load test on a client/server application without involving end users or end-user equipment. It performed the load test by capturing the middleware and creating virtual users to simulate actual users. QALoad then generated graphs and reports to help us understand the performance of the system."

QALoad Delivers Site Integrity

From Day One, Westpac simulated up to 10,000 concurrent users to ensure the system could perform well even during the heaviest trading periods. The system was tested using a combination of typical actions made by investors, for example, 10 percent trading, 70 percent examining their portfolios and 20 percent making general inquiries.

"Not only does Compuware QALoad require half the memory of current market offerings, at 1 to 2 megabytes per simulated user, but Compuware's integrity and quality assurance were notable," says Sundaram. "QALoad's performance in an important test environment was excellent. Although Compuware was not a regular supplier of Westpac prior to testing the discount share trading system, we will definitely consider using QALoad again for other projects in the future."

Westpac began testing the Westpac Broking system in August 1999, completing implementation and going live to employees in November 1999. The official launch of Westpac Broking in January 2000 corresponds to a boom in online retail trading in the last 12 months. The Sydney Morning Herald recently reported that at the beginning of 1999, online trading accounted for less than five percent of total market trading volumes. Today, it is at almost 15 percent and is expected to continue rising.

Staying On Top

"People enjoy trading online. Cutting out the middleman gives investors a greater sense of control," says Sundaram. "The accessibility of information on the Internet enables investors to make their own decisions, reduce consulting fees and increase the ease and efficiency of trading. We expect online trading will take over as the preferred alternative method of trading to traditional stock broking. The large number of people interested in taking up online broking indicates that this is a very essential product line for the bank in terms of providing complete customer solutions "

By the end of the first week of March 2000, Westpac had 12,000 registered customers, with trades peaking at about 900 per day. Ninety percent of these customers used the Internet to conduct their transactions.

Sundaram says, "According to www.consult.com.au, online broking will account for 30 percent of the total number of trades on the Australian stock exchange by 2005. Online brokers predict their market share will grow to 20 percent by the end of the year and 45 percent by 2003. We certainly intend to contribute to that trend."