Tech blog

AUSTRALIA’S other distended three banks will be farfetched to follow the Commonwealth Bank and collectively spend billions replacing their core information technology systems.

While CBA had got the vault on its rivals by a four-year, $580 million look into, a shortage of people to run the ageing systems will trigger similar projects at the other banks, according to analysts.

CBA believes the payments industry will come under pressure as it rolls out real-time payment processing to its customers, as part of its upgrade.

"Putting the customer record-keeping on to a real-time basis power of determination put a lot of pressure on the payments hypothesis," said CBA executive general manager, banking products, Leslie Martin.

It is understood that in the near subsequent time, the Australian Payments & Clearing Association (APCA) will release a discussion paper on the issues affecting the 10 to 15 different payment systems that currently process the form of productive effort’s transactions.

With such a critical project, the CBA has also left itself exposed to a more operational risk.

CBA announced it would make the move, long-awaited at total the major banks, after a two-year planning project.

German software house SAP and US systems integrator Accenture will be the main technology suppliers.

Of the other banks, NAB is understood to be closest to unveiling its own project to overhaul its core IT systems.

"The fact is that all banking core systems are becoming rapidly obsolete and this represents little in greater numbers than ’stay in business’ capex," said JPMorgan analyst Brian Johnson.

"Addressing legacy regularity issues is not isolated to CBA, and we expect the other Australian major banks to invest similar amounts in the approach years similar to the level of available support for ageing systems diminishes."

Citigroup analyst Craig Williams said the competitive advantage that might result from successful implementation would pressure peer banks to reassess their own situation and some would launch system replacement projects of their hold.

He estimated the project would reap $100 million to $150 a thousand thousand in cost savings through lower maintenance costs as well as reduced headcount.

"Genuine real-time processing will acknowledge for improved customer services levels, and greater systems flexibility will enable broader product functionality and faster time to market," Mr Williams said.

"As a result, the bank should be able to drive improved sales performance."