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NEWS
Kiwibank facing trouble with SAP core banking implementation
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ew Zealand-based Kiwibank is facing problems with its SAP-based core banking project, according to a quarterly disclosure seen by Reseller News.
The project, named CoreMod, was labelled as a “significant and complex” programme taking “longer than anticipated”. Completion, read the note, will require a “higher level of investment and operating risk” spread over two to three years.
Previous figures from the bank, which is owned by NZ Post, indicated that the core replacement had a budget of around NZ$100 million ($73 million). It can be assumed that the actual figure is much higher. Interest NZ published a report in February saying that Kiwibank expenses were rising as it rushed ahead with the upgrade.
Back in 2014, when Kiwibank announced its intentions to replace its core, some eyebrows were raised. The bank had previously committed to its legacy provider, Ultradata, after a failed implementation of Infosys Finacle in 2009.
A Kiwibank spokesman told Reseller that the bank was cautious about providing any detailed information about the project.
“It is continuing to progress and our CEO will provide an update in general terms when we release our financial results in late August,” he commented. “We consider the progress of the project as commercially sensitive.”
The bank reportedly moved into phase two of the implementation in August 2016, migrating savings and transaction accounts.
Phase one, which entailed deploying the core SAP payments engine, was completed in August 2015. Phase two was originally scheduled for completion between May and July 2017.
Kiwibank’s chief executive Paul Brock told Interest NZ: “I think at the end of the day it’s a multi-year programme, they’re pretty complex, they always seem to take longer and be more complex than what you expected.”
In 2016, NZ Post sold around 37% of Kiwibank to the New Zealand Superannuation Fund and the Accident Compensation Corporation for a combined NZ$294 million ($358.7 million).
Banks need “change of culture” to win back customer trust
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anks need to publish more information about conduct and work culture, and less about their hard financials. That’s according to Andy Griffiths, executive director of the
Investor Forum, who reckons that more detailed insider info is the way to win back public trust.
The Investor Forum is an institutional investor association which represents 35 of the largest investors in the UK. Members of the group include BlackRock, Capital Group and Fidelity International.
“We want to encourage investors to ask more questions on these non-financial issues, like what do customers think about what banks are doing,” Griffiths told the Financial Times. Banks, he said, should give more information around those sorts of issues.
Banks in the UK have had their reputations tarnished by misconduct scandals and regulatory oversights. More than $50 billion in fines has been issued at a time when institutions should be trying to win back customer trust.
www.ibsintelligence.com | © IBS Intelligence 2017
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