Off the back of delivering its building block program and simplification projects under the group's 'One Company. Many Brands' strategy, Suncorp Bank has announced it will be dedicating an estimated AU$270 million to changing the bank's core banking system by 30 June 2016.
Suncorp Bank chief executive John Nesbitt said the project is already half-way through, and the bank still has a remaining AU$140 million to spend until the deadline date, before delivering full run rate benefits from 1 July 2016.
"Through Project Ignite we're going to change all the bank's core systems and we're going to change the way we work across the bank for customers," Nesbitt told a room of investors at Suncorp Group Investor Day in Sydney this week.
"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."
Described by Nesbitt as a simplification and automation project "on steroids", the Ignite project will see the decommissioning of 12 out 17 existing legacy systems, the re-engineering of 580 processes, and the removal of duplication "massively".
The project is expected to deliver cost to income of less than 50 percent and rationalise the bank's product set by more than half, Nesbitt said.
He also said the bank expects to capitalise 80 percent of the AU$270 million that is being spent on the core banking overhaul.
"Ignite will future proof the bank," Nesbitt said.
"The level of simplification and automation provided will enable us to respond to emerging customer needs, cost less, and be much faster to market. Being nimble in embracing technology will provide a real advantage over our regional peers, and enhance our position against the majors."
Oracle, Thoughtworks, and Wipro — all existing partners to bank — will be providing support to Suncorp as part of the Ignite project, Nesbitt added.
According to Nesbitt, launching Ignite is another step in responding to consumer and industry trends where the bank aims to take a customer-centric approach to making the changes to the bank's core banking system.
Ignite will be executed on the foundation that been established by Suncorp Group's building blocks program, which is providing AU$235 million in annualised savings from the consolidation of claims processes, pricing engines, employment arrangements, data and financial systems; and its simplification projects that are on track to deliver AU$225 million in savings in FY15, and AU$265 million in savings in FY16.
The group will complete the simplification program in FY15 and deliver major programs through the FY16 including the new banking platform, real estate consolidation, finance reporting optimisation, procurement simplification, and business intelligence project.
"We feel we are very well placed to deliver this program because we have been delivering large scale transformations for well over five years," said Suncorp Group CIO Matt Pancino.
"We've talked at lengths about our building blocks program and our legacy simplification program — we know we have the talent, the capability, and experience to do what it takes to execute a program like this."
In conjunction to Ignite, Suncorp Group plans to move the cloud to build a more agile environment that will enable it to speed up its product delivery processes.
Pancino said the company has already been running its own private cloud for the last three years, but needs to take it further, as the group is still "spending an enormous amount of our resources supporting and buying technology for our own cloud" and are therefore are "missing out on opportunities".
"The difference we think cloud will bring to our strategy is going to enable us to innovate faster in this fast moving environment," he said.
Suncorp Group's strategy is to work with cloud providers, with the likes of Amazon, IBM, Microsoft, and Oracle to take a "measured and controlled approach" to moving to the cloud.
Some results the company has seen so far, as result of moving into the cloud, include being able to decommission over 1,100 development and test environments and run them on an as-need basis, and being able to run its entire digital stack for its Bingle.com.au asset for $2.67 an hour on Amazon.
The shift to the cloud will make way in helping the company deliver its business intelligence program, which was launched this year, said Adrian McKnight, Suncorp Group chief data officer.
McKnight said the company has already moved 12 legacy data warehouses into a single data store, including a range of polices, claim, finance, and HR data, with more to be added.
He said it will provide the company with a "single source of truth of well-structured data".
Suncorp's transformation follows other Australian banks that have been undergoing similar changes. Commonwealth Bank invested AU$580 million in a four-year program back in 2008 to modernise its core banking systems, and introduce new features with the help of SAP and Accenture.
National Australia Bank embarked on its AU$200 million Nextgen core banking platform back in 2009, and the results of a number of consolidation project as part of the overhaul was reflective in the bank's full-year profit for 2013 when it reported a cash profit of AU$5.94 billion.
Meanwhile, Westpac announced it was consolidating its core banking platform with St. George during its full-year results last November. The plan will see Westpac and St. George share a common infrastructure access layer currently used by Westpac, before St. George, and eventually Westpac move onto the the latest version of its CSC-made Hogan core bank platform, Celeriti.