The Commonwealth Bank has flagged a dramatic increase in its investment into core banking modernisation, adding nine months onto the transformation timetable and an additional $370 million of spending.
The spending increase, flagged during CommBank's half-year profit announcement yesterday, saw total spending on the IT modernisation program increase to around $1.1 billion.
The project originally began as a $580 million undertaking, but was increased by an additional $150 million when CommBank acquired Bankwest.
CommBank cited increased project complexity and the need to develop new multi-brand-based functionality to the modernisation project as the reason for the cost rise, enabling it to be easily exported to its offshore banking subsidiaries.
"As the upgrade of core systems has progressed it became clear that there were opportunities to add functionality over and above what was initially scoped," CommBank said in its report to shareholders, adding that to enable the changes, CommBank is adding nine months onto its transformation timetable.
"The group is using the opportunity to ensure the new system is multi-entity enabled, which will make it faster and cheaper to ultimately include the offshore banking business."
CommBank trumpeted its achievements to date in the core banking modernisation, saying that over $100 billion in 11 million accounts had been successfully migrated to the new, real-time banking system.
Information technology services contributed to a rise in CommBank's operating expenses compared to the same period in 2009, with data processing costs up by a whopping $25 million to $129 million. This also marks a $6 million increase over the last six months alone, up from $123 million at half year ending 30 June 2010.
Despite the rise in data processing costs, operational expenditure on information technology services was down by $23 million in comparison to six months ago.
According to the bank, 14 per cent of all log-ins to NetBank are coming through from mobile devices.