Just $30m for NAB's first step

Just $30m for NAB's first step

Summary: The National Australia Bank will approach the overhaul of its core banking systems cautiously over the next year, spending just $30 million on the Oracle-based first stage of the project, the bank's chief information officer Michelle Tredenick said today.

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TOPICS: Oracle, Banking
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The National Australia Bank will approach the overhaul of its core banking systems cautiously over the next year, spending just $30 million on the Oracle-based first stage of the project, the bank's chief information officer Michelle Tredenick said today.

Briefing reporters on the move, Tredenick said NAB planned to invest just $30 million in the first year to build a new core banking system, which will initially only serve its new ING Direct-style online bank, Star Direct. The figure pales in comparison to the total $1 billion the bank has earmarked for core systems replacement over the next five years.

In the hot seat ... NAB CIO Michelle Tredenick
(Credit: NAB)

In addition, NAB isn't pinning its hopes on Oracle delivering its i-flex core banking platform in time for Star Direct's launch. Instead, the bank will rely on its existing platform for the launch of the new low-cost bank, said Tredenick.

"Star Bank is launching to the market with a product in the near future and we are going to accommodate that on our existing infrastructure," she said. "In parallel though, we are working to set up the technology platform on the new platform now that we have announced the decision, and we will be doing that over the next six to nine months," she said.

Tredenick doesn't expect Commonwealth Bank's $580 million five-year core banking system program to cause NAB problems in accessing skills during its own overhaul, in part because those skills are already extremely rare in Australia.

"This is a very different style of technology and will require access to different labour markets," she said.

"I don't think the Commonwealth Bank's announcement makes a lot of difference in terms of skills we will try to access for our journey, but I think it's one of the challenges of the program to work with our people and the industry generally to ensure we have the right skills."

"In fact it is quite likely that this will create jobs in Australia because we will be working with our suppliers to create an Australian presence," she said.

The CIO said the decision to go with Oracle had little to do with the bank's existing Siebel systems (Siebel is now owned by Oracle). Tredenick said the decision on supplier choice was unanimous amongst the bank's business and technology committees.

"Oracle had been on an acquisition path in the financial services sector and has really been about assembling a set of products that are best of breed and that will form a broad platform for us to choose from," she said. "I think the i-flex acquisition was quite fundamental to that and will form the core of their offering to us."

"We have very deliberately chosen Oracle as a partner because we want to partner with a software provider that will work with banks around the globe and provide best of breed software to use. We will participate in a global banking environment that will enable us to be competitive."

Analyst firm Gartner has previously warned that a weakness of i-flex is that customers are unable to access code, meaning that NAB will likely be heavily reliant on Oracle for any direct customisation to the platform.

Topics: Oracle, Banking

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.

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