NAB overhauls heart, lungs, spleen

Beverley Head
Thursday, 03 November 2011 16:38

Business IT - Technology

NAB started its bank transformation project in earnest two years ago - and today describes it as an overhaul of the heart, lungs and spleen of the bank - but there is still no indication of when the transplant might take place.

The bank's chief executive Cameron Clyne failed to give any indication of a launch date at the release of the bank's annual results earlier this week, and speaking at the FST Technology and Innovation Conference in Sydney today, Gavin Slater the bank's group executive for group business services, was similarly opaque about a launch date for the new system which is being developed in association with Oracle.

NAB's full year results show that during the year to the end of September the bank's spending on infrastructure increased 56 per cent to $720 million while its capitalised software increased by 24 per cent to $1.3 billion - much of which is associated with the NextGen project. But investors aren't being told when that investment might bear fruit.

Explaining the need for the overhaul Mr Slater said that the core issue for banks was that there existed 'a real disconnect between the expectations of customers and what we can do as an institution' based on legacy systems which could be 40 years old. He said that banks had no option but to completely overhaul their systems in order to be able to compete in the future.

'The days are gone when you can do add ons'¦there needs to be a far more strategic approach in terms of investment,' he said.

The approach which NAB has taken is to partner with Oracle on the development of an entirely new banking platform. It has also committed to avoiding any form of customisation of that platform in order to be able to take advantage of future product rollouts to avoid investing in what could become next generation legacy.

Mr Slater described the approach as a 'total overhaul of the heart, lungs, spleen of bank'. Besides its agreement with Oracle NAB is already a year into an arrangement with IBM to run its infrastructure and data centres; has been working with Telstra on an upgrade of its network which has recently been rolled out to 800 branches and 200 business branches; and partnered with SAP on systems to manage human resources, procurement and finances.