CommBank dives into $580m banking IT revamp

CommBank dives into $580m banking IT revamp

Summary: The Commonwealth Bank has announced today that it is embarking on a AU$580 million four-year program to modernise its legacy core banking systems and introduce new features with the help of SAP and Accenture.

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The Commonwealth Bank has announced today that it is embarking on a AU$580 million four-year program to modernise its legacy core banking systems and introduce new features with the help of SAP and Accenture.

The bank's back-end systems date back to the early 60s, Commonwealth Bank CIO Harte said, and are holding back change at the bank.

Customers wanting to bank online outside of traditional office hours, like weekends, see their transactions held back until they are processed during normal working hours in a batch process. The new modernised systems will allow real-time banking by removing these "monolithic batch-based systems", Harte said.

The introduction of some banking products will become faster, Harte said, such as home loans which can be issued in hours or days as opposed to weeks.

Modernisation will remove a lot of the manual handles and paper-based processes required to process transactions, according to Harte, making the system cheaper to maintain — savings which the bank has promised to pass onto customers.

While the modernisation will result in fewer middle office jobs, the bank is not necessarily expecting redundancies, according to executive general manager of core banking modernisation, Dave Curran. "We're not setting out as a head count reduction," he said.

The first step of migration will occur this year, with customers scheduled to see real-time banking in 2009.

Despite the modernisation work, the bank will still keep its mainframe at the core of its IT. "It's still very efficient, still very powerful," Harte said. Curran said however, that this will be reviewed over time, adding that the modernisation will make a migration from the mainframe much easier.

The bank will be using SAP for banking, based on Netweaver, and has appointed Accenture to support the implementation of the program. The reason for choosing SAP was the flexibility of its system architecture and the company's dedication to Web services, according to Harte.

The bank also looked at products from Oracle, i-flex, Finicle Infosys and TCS. "The usual suspects were interviewed," according to Harte.

Harte said that despite the length of the project being longer than the average CIO's tenure, he intends to stick it out. "I'm not an average CIO. The system's going to outlive all of us," he added

The bank has already undergone a revamp of its front-end system, resulting in IT savings of AU$200 million per annum, according to Harte.

Topics: Browser, Banking, Enterprise 2.0

Suzanne Tindal

About Suzanne Tindal

Suzanne Tindal cut her teeth at ZDNet.com.au as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for the site.

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Talkback

12 comments
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  • netbank>?

    Could this be the reason why I can't use netbank ?

    it's so extra special - we can't use the bloody thing
    anonymous
  • netbank...

    seems fine to me...

    perhaps if you expand help can be provided.
    anonymous
  • On time to Budget

    Lets see if it is on time and to budget or there is a provision in the annual report for extraordinary costs.
    The track record with respect to these type of projects is not very good. The way we build software applications is fundamentally flawed.
    anonymous
  • Netbank

    Harte is a dill - the term deposits back end system was installed in the mid 70's
    anonymous
  • Netbank

    Sorry. That was my error. Wanted to give an example of one of the backend systems that was being modernised. Some others to be modernised are Demand Deposit System and Passbooks system which according to Commonwealth Bank documents are from the 60s.
    anonymous
  • Project Success

    As an impartial observer I have limited confidence in this as a project - the application sales guys obviously did a good job. This will be like a number of oher so called 'ground breaking' ICT pojects. Being based on our current technology approach they will be very, very luck if it is on time and any where near budget - messaging integration as per the solution proposed will be very costly to maintain.
    anonymous
  • So we shouldn't modernise legacy systems?

    Just sit with these relics forever?

    Try a read of this

    http://www.australianit.news.com.au/story/0,24897,23613501-5013038,00.html
    anonymous
  • Paying Commonwealth Home Loan

    Will this new system eliminate the two day delay between the Commonwealth Bank taking my home loan repayment from my Commonwealth Savings Account and paying it into my Commonwealth Home Loan Account. Perhaps all the interest they save from these delayed transactions will pay for the new system.
    anonymous
  • CBA SAP and Accenture Deal

    Are any regulators are shareholders looking at the huge conflict of interest in this deal. CBA Board member Jane Hemstritch and Senior IT Exec David Curran are both ex-Accenture senior partners. Both hold millions (multi millions) of dollars in Accenture shares. Media releases advising that Accenture has signed a $200million++ contract move share prices. These two had a strongly vested interest in getting Accenture selected. Pity the poor Comm Bank shareholders and employees. Where is APRA?? Where is ASX??
    anonymous
  • project costs

    I hope somene holds the Board's feet to the fire on this project. Jane Hemstritch, one of the newest Board members, holds millions (I mean millions and millions) of dollars worth of Accenture shares. It was a total conflict of interest for CBA to select Accenture. If additional payments to Accenture are approved when (and it is only a matter of when) this project blows out, heads should roll.
    anonymous
  • and the rich get richer

    i also know that another person who was key to selecting sap and accenure is also an x-accenure partner: david curran. not only did he help get accenture in, he gave them insider information AND now he is the project director. LOL. he will be helping make sure they don't lose money on the project and is already preparing more funding requests for jane hemstritch and the rest of the commbank board to approve..what a bloody joke
    anonymous
  • CBA SAP and Accenture Deal

    Stop whining mate on every public forum. Go spin that yarn elsewhere where you shall be entertained.

    I represent neither ACN nor SAP. I am the common man and I am loving the new demand deposit accounts with CBA.
    anonymous