CBA, Bankwest tie IT knot in 2011

CBA, Bankwest tie IT knot in 2011

Summary: Bankwest's existing technology platform would continue to underpin its operations until the Commonwealth Bank has fully moved across to its new core banking system in 2011, the bigger bank revealed today as it detailed its takeover plans.

SHARE:
TOPICS: CXO, Banking, Outsourcing, SAP
3

Bankwest's existing technology platform would continue to underpin its operations until the Commonwealth Bank has fully moved across to its new core banking system in 2011, the bigger bank revealed today as it detailed its takeover plans.

CBA had said earlier today that it would merge the pair's IT platforms as part of its $2.1 billion acquisition of Bankwest, which will also deliver into its arms the fate of the Western Australian Bank's joint IT services venture with Unisys.

"We won't do that integration until we have completed the Commonwealth Bank's integration to the new platform and we see that being three years out. So Bankwest will continue to run on its systems until that time," CommBank CEO Ralph Norris said today at a media briefing, in response to a question by ZDNet.com.au.

The $2.1 billion acquisition has the potential to put CBA's core banking modernisation program, currently underway with SAP and Accenture, under pressure if it wants to achieve savings it has estimated to come from the acquisition.

The bank estimated the cost of integrating Bankwest, including technology, transition and restructuring, at $330 million, with $220 million a year to eventually be shaved off its annual costs, including technology spending.

Technology has been positioned as a key element of that cost-cutting plan since Norris today said staff cuts were not likely to occur as a result of the acquisition.

"We are looking to re-deploy staff rather than making redundancies," Norris said.

CBA chief financial officer David Craig said today that the merged entities would cut 20 to 25 per cent off the combined bank's costs.

"But that will take some years to kick in because we're running [Bankwest] as a free-standing entity. Some of those savings will come in due course as we move to our new core banking system, which we will roll out in three years time," Craig said.

Questions over the future of Unisys West still remain. The IT services joint venture between Unisys and Bankwest was formed primarily to meet Bankwest's outsourcing needs.

"The contract that's in force there will remain in force into the foreseeable future," said Norris.

Topics: CXO, Banking, Outsourcing, SAP

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

3 comments
Log in or register to join the discussion
  • Unisys Provision of Services

    Guys, this article is inaccurate. Bankwest brought their IT services in house from Unisys late 2007 and have been operating under this model since then
    anonymous
  • Out Of Touch

    From late September 2007 Unisys West IT became HBOSA IT (as per previous comment). Unisys West no longer exists.
    anonymous
  • Correction to previous comment

    Incorrect: Unisys West does continue to exist and does continue to service other WA-based clients.
    anonymous