Irish banks settle with Oracle over banking software 'fiasco'
Bankers spunked millions on Flexcube
Allied Irish Banks (AIB) has settled its lawsuit with Oracle over Flexcube, a product the bank claimed was "beset with serious technical problems".
AIB signed a deal to deploy Oracle's Flexcube Universal Banking software and Flexcube Messaging Hub software back in 2007 – the deal was inked with subsidiary Oracle Financial Services Software. The banking group claims to have spent €84m on the gear since then that ended up being "wasted expenditure", the Irish Independent reported.
The banking group started proceedings against the Oracle unit at the very end of last year, and Justice Peter Kelly was told yesterday that a settlement had been reached.
During the case, AIB said that just 3,000 customers out of an expected five million switched over to the service over three years before work on the implementation ground to a halt in March 2010 and the bank returned to its old retail banking system.
The banking group was trying to claw back the €84m it spent on the project and damages for loss of profits and goodwill in the case.
AIB also said that the Oracle subsidiary told it in March that it was planning to cease development on the product on IBM's z/DB2 platform for Western banks, but that it would continue to work on the product for AIB.
That would have left AIB as the only Western bank still using the z/DB2 platform, which it said couldn't work because it had been promised upgrade costs would be shared across a number of similar banks and that couldn't happen if it was on the wrong platform.
The bank also claimed that an alternative product on the Oracle platform that it was offered was "wholly unsuitable".
The terms of the settlement have not been disclosed by either party.
AIB declined to comment. ®