Feeds

Co-op Bank to splash £500m on system revamp

So is this where the next banking-IT disaster will hit - or where it won't?

Build a business case: developing custom apps

The Co-operative Bank has put tech suppliers operating in Blighty's financial services sector on red alert after confirming plans to spend £500m on overhauling its creaking IT infrastructure after years of "under-investment".

A wider rescue plan is being initiated by the bank after it discovered a £1.5bn black hole in the balance sheet created by defaulted loans and the 2009 merger with Britannia Building Society.

The backbone of the turnaround efforts, thrashed out this weekend, include shuttering around 15 per cent of UK branches and axing part of the workforce, but also extend to dragging its aged IT into the 21st century.

"As a result of historical underinvestment (among other factors), a number of the bank's IT systems now, or will soon, require their hardware and operating systems to be updated and improved," the bank said in its recapitalisation plan.

A review of the pressing needs has been completed and an IT development roadmap has been agreed. This has been split into four phases: remediation, digital catch-up, simplification and strategic optimisation.

The "primary focus" for next year and 2015 is "remediation of existing system issues" to meet commitment to regulators and create an IT rig that improves the web-based and mobile banking services.

The execution of the bank's turnaround strategy will take three years, the Co-Op stated.

"The bank has currently budgeted in the region of £500m in connection with the re-engineering of the bank's IT platform to support the Core Business strategy, its cost saving programme, and the reorientation of the bank's distribution channels."

"Within this amount, total investment spend on transformation, including IT remediation, digital catch up and other IT initiatives in the next three years of approximately £400m to £450m is currently budgeted, of which approximately 40 to 45 per cent is currently expected to be capitalised," the Co-Op added. ®

7 Elements of Radically Simple OS Migration

More from The Register

next story
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
A new approach to endpoint data protection
What is the best way to ensure comprehensive visibility, management, and control of information on both company-owned and employee-owned devices?