National Australia Bank on Wednesday announced that phase one of a five-year Next Generation Platform (NGP) initiative to overhaul its core banking systems has begun.
NAB expects the NGP strategy to significantly change the way in which technology services are delivered to its customers and employees.
The bank has chosen Oracle as its partner for the first phase of the NGP, which will deliver the platform for the Star Direct business; a new "specialised, low cost, high service bank that will be launched later this year that will focus on emerging branchless banking opportunities for savers and investors".
NAB said its existing IT systems have served the business well to date, but aren't sufficient to support its future strategic direction.
"To help us achieve our strategy of becoming a sustainable out-performing company we need to have technology that will underpin our ability to innovate, support greater speed to market and enable us to deliver new products and services to our customers," a spokesperson from NAB's Technology division told Computerworld.
The Oracle/iFlex Flexcube suite will serve as the foundation of Star Direct, with the majority of software requirements expected to be delivered by the Oracle suite. NAB said it is seeking to establish a deep partnership with vendors to ensure it takes maximum advantage of the platform capabilities as they are delivered "out of the box".
"This approach will reduce the need for significant customisation and ensure that we benefit from ongoing partner upgrades and platform enhancements," the spokesperson said.
"While Oracle is delivering the platform for the Star Direct business we will plan the second and subsequent phases of our Next Generation Platform strategy in parallel. It is at the end of this planning phase (estimated to be approximately six months from mobilisation) that we will be able to provide further detail on how we plan to sequence this multi-year journey and who we will partner with for the core banking system replacement."
The entire IT overhaul is expected to take five years to complete, with the first deliverables of phase one coming in 6-8 months time.
The Star Direct business will have a small dedicated IT team to assemble its technology solution needs, with services delivered through the NAB Technology division.
NAB said the IT overhaul and creation of Star Direct will facilitate the delivery of flexible, new products and services to a wider range of customers with greater speed and efficiency.
"[It will] allow us to innovate and engage with customers using different technologies and form deeper relationships."