NAB UBank IT 'well advanced'

Phase one of National Australia Bank's core banking system replacement strategy will be completed by June this year, the bank's chief executive Cameron Clyne said today.

Phase one of National Australia Bank's core banking system replacement strategy will be completed by June this year, the bank's chief executive Cameron Clyne said today.

This program is well advanced, with build of the online deposits capability scheduled to finish in the second half of 2009

NAB CEO Cameron Clyne

Despite the change in leadership in NAB's technology division following the replacement of chief information officer Michelle Tredenick with Adam Bennett, Clyne told investors the bank had forged ahead with phase one of the five-year, $1 billion Next-Generation core banking systems replacement.

Clyne said the replacement, which initially targets its internet banking unit, UBank, had progressed and was on track for delivery by June. Initial features expected to be delivered by the project are a new deposit platform for UBank.

"NAB has selected Oracle as its partner for the first phase of this strategy. This program is well advanced, with build of the online deposits capability scheduled to finish in the second half of 2009," said Clyne.

NAB had originally allocated $30 million for the project in year one under Tredenick's watch, with the plan to deploy the broader group over the coming five years for an expected total cost of $1 billion.

The bank did not say whether the project had gone over budget; however, Clyne said most of the $55 million cash it had spent on infrastructure in the March half had gone on UBank's core systems replacement. "In the March 2009 half, the majority of the expenditure was on developing a new deposit platform for UBank," said Clyne.

The next phase of the overhaul will hinge on the success of ServCo, a service company NAB has established within the bank, dedicated to sharing practices, processes and standards across the group. The existence of the division was flagged in mid-2008.

The bank's financial statement for the half year preceding March showed NAB's technology costs continuing to rise. NAB spent $167 million on computer equipment and software for the half year to March 2009, up from $139 million during the same period last year. Data communications and processing costs also increased over the past year to $82 million over six months, up from $58 million to March 2008.

NAB is yet to announce a solution to its IT outsourcing initiative ITO Wave 2, under which it intended to offshore IT and back office roles to India via outsourcing partner Satyam. Its plans were scuttled as a result of the financial scandal affecting Satyam — a month prior to NAB's decision to replace Tredenick.

NAB spokespeople recently told ZDNet.com.au that the bank "welcomed" fellow Indian outsourcing company Tech Mahindra's decision to take a majority stake in Satyam, but added that it had not changed its decision to put a stop on issuing more work to the company.

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