Macquarie BFS' digital efforts drive 18 percent rise in tech spend

Macquarie’s banking and financial services (BFS) operating group recorded an 18 percent year-on-year jump in technology spend, driven by its ongoing digital efforts.

Its FY22 results show [pdf] that BFS had “technology expenses of $464 million for the year ended March 31 2022”, up from “$394 million in the prior year, driven by investment in digitisation to support business growth and regulatory requirements.”

Comparing the first and second halves of FY22, technology expenses in BFS grew from $214 million to $250 million.

Technology expenses include staff costs, depreciation of technology assets, amortisation of capitalised software and maintenance costs, according to footnotes in the financial filing.

Structurally, BFS is one of two operating groups that collectively make up the larger Macquarie Bank entity; the other is commodities and global markets, abbreviated to CGM.

In an annual report [pdf], Macquarie Bank said that CGM also saw “higher expenditure on technology platforms and infrastructure” in FY22.

More broadly still, Macquarie Group has oversight of Macquarie Bank, as well as the non-banking group business comprising Macquarie Asset Management (MAM) and Macquarie Capital.

All are supported by central service group functions, one of which  - the corporate operations group or COG - also houses some IT spend, in areas of technology, data and transformation and security support, which has its own costs and spend.

Macquarie Group forecast [pdf] that groupwide technology spend would be “ongoing” in the medium term, though it did not specify to what level.

On a groupwide basis, regulatory and compliance were contributors to technology spend; “a number of technology projects” contributed to a 31 percent year-on-year increase in regulatory project spend.

A breakdown of the projects shows [pdf] that at least two were data-related: one under the line item of “enterprise data management” saw spending increase from $20 million in FY21 to $35 million in FY22.

Macquarie Group recorded an FY22 net profit of $4.7 billion, up 56 percent year-on-year.