Suncorp Group Limited has released its results for the 2017 financial year, reporting AU$394 million in after-tax profit.
Despite an increase in profit over the bank's AU$383 million for 2016, Suncorp told shareholders its profit would have totalled more had it not needed to pump further funds into its core banking platform, contracted to Oracle.
"The core banking platform implemented last financial year has taken longer than expected to fully embed and adapt for use in the Australian market," Suncorp said.
The group expects to soon complete the final migration phase for remaining retail loans onto the core banking platform, at which point it said it will pause the migration of deposits and transaction banking products, pending further system enhancements from Oracle.
"The group recognises transaction banking as one of the most important services it provides to customers and will focus on accelerating payment technology and digital banking capabilities to deliver increased value to customers as society continues to progress towards cashless transactions," the bank continued.
The bank previously had its eyes set on reaping AU$170 million in benefits by the 2018 financial year from its technology optimisation program.
Suncorp announced it would be dedicating an estimated AU$270 million to changing its core banking system back in May 2014.
Halfway through the project at the time, the bank's now-retired chief executive John Nesbitt expected the new platform to be live by June 30, 2016.
"It's much more than just a technology project; it's a complete transformation of the bank. In two years we'll have a new bank," Nesbitt said.
Described by Nesbitt as a simplification and automation project "on steroids", the project was expected to see the decommissioning of 12 out 17 existing legacy systems, the re-engineering of 580 processes, and the removal of duplication "massively".
In August last year, the bank announced its project had been completed, and that it was going to focus on using the infrastructure as the foundation to grow more "connected customers".
Speaking with media on Thursday afternoon, CEO and managing director Michael Cameron explained Suncorp has decided to leave a small group of its products running on the old system, rather than take a risk in launching a new platform.
"At the end of the day, the customer experience is what counts, we don't want to be in a situation where we're getting outages so all we're really doing is waiting for a new version of the same software to be released, which incorporates the sorts of things that we want, rather than build them ourselves internally," he said.
"It will actually cost us a little less, it will de-risk the operations from a customer perspective, and for us it means running two systems for a period of time.
"While it's not ideal, it's something that we've thought long and hard about."
On Thursday, Suncorp said its operating expenses were flat at AU$638 million, which included additional expenditure to complete the migration of loans and lending origination to the new banking platform.
For the year ended June 30, 2017, the bank spent a total of AU$41 million on information technology and communication.
The bank also told shareholders on Thursday its strategy had "evolved" to reflect its aspiration to be an "agile, resilient financial services company".
According to Suncorp, there is an increased focus on building partnerships with third parties to extend the range of solutions for Suncorp's customers and to drive growth for the business, with its new Suncorp Marketplace touted as achieving these goals.
"The Suncorp Marketplace will create a connected network of brands, partners, solutions, and channels to meet our customers' financial wellbeing needs," the company explained. "We will provide our customers with a suite of personalised solutions that meet their needs at key moments in their lives."
The bank said delivering the marketplace will require investment and resources to the tune of AU$100 million, to be spent in FY18.
"We want a single, digital experience delivered to our customers," Cameron explained. "The launch of the single, digital customer experience is not reliant on any further work with our core banking system. In many ways, de-risking our approach has really opened up some more exciting possibilities, freed up the capacity within the organisation to work on some of these other areas."
He also said he intends to move the bank away from merely a financial services provider and into an "ecosystem".
Lisa Harrison, formerly the executive GM for Insurance Operations at the bank, was promoted on July 1, 2017 to the role of chief program excellence officer. Her remit will focus mainly on the co-ordination of the Suncorp business plan, in particular building the marketplace.
The additional investment in the marketplace will also support national expansion of the group's brand, Suncorp said on Thursday.
At the start of the financial year, Suncorp implemented a revised operating model and organisational structure, which now comprises Insurance, Banking and Wealth, New Zealand, Customer Experience, Customer Platforms, Finance and Advice, People Experience, and Technology, Data, and Labs.
During the year, Suncorp scooped up former Microsoft Australia managing director Pip Marlow as its new chief executive officer for Strategic Innovation.
Updated 2.10 pm AEST August 3, 2017: Added remarks from Suncorp CEO and managing director Michael Cameron.