Suncorp weighs core banking options


Tier two bank Suncorp has started investigating the case for instigating a program to replace its Hogan core banking platform, although chief information officer Jeff Smith also believes there is still life in the legacy technology.

Core banking platforms sit at the heart of any bank and constitute the base on which the bank’s technology platform is built – for example, modern applications such internet banking systems commonly sit on top.

However, many of Australia’s banks have core banking platforms that have been in place for decades – often built on mainframe technology – and are becoming increasingly unwieldy and difficult to maintain.

Other banks such as the Commonwealth Bank of Australia have already instituted major programs to replace their core, but they can be pricey – CBA’s SAP- and Accenture-led overhaul has a budget of $730 million. CBA chief information officer Michael Harte has hailed the new technology’s ability to provide ‘real-time banking’ – without the need to run batch processing jobs.

National Australia Bank has also put its foot in the water on its own core revamp, but others such as Australia and New Zealand Banking Group appear to be holding off for now to focus on other projects.

Suncorp’s Smith said Hogan operated “quite well”, but the software’s owner CSC hadn’t upgraded it in a long time. “We are taking a look at that now, saying: ‘Do we want to go and do something bigger?’,” he said in a recent interview.

Smith noted more modern options were available from from vendors like Oracle and SAP, although he noted the market was limited. “We are just looking through that now, because it makes sense to do that if they are really good value propositions,” he said.

But despite the investigation, the CIO believed there was still life in the old legacy platforms yet, noting it was applications built on top of the core such as internet banking that are important. “Exposing services on this platform is actually quite easy,” he said. “We’ve taken the cycle time down eighty percent to build a new service on top of Hogan.”

Smith said the real-time banking idea which Harte has described is important, but it was necessary to look at what the real definition of the term was. “We have real-time banking today in our Hogan system,” he said. “You still run batch programs or reconciliation, but even in the new core banking systems, you still do that.”

The CIO noted opening accounts and conducting transactions between systems in the bank’s branch and automatic teller machine networks took place in real time even with Suncorp’s current platform. One of the main motivators to migrate to a new platform, he said, was the availability of talent to maintain it.

“We all have to be cognizant that the average age of Hogan developers is in the fifties now,” Smith said. “That is a bigger issue for me, because we want to keep people enthused and keep them engaged, but you are running into retirement years, and I think that is a bigger issue than the technology side.”

“I think the big advantage of the new platforms is the ability to be able to do more with them because you have a bigger supply base of individuals and technology that you can use.”

Stay tuned for our wider profile on Suncorp’s Jeff Smith this week.

Image credit: Leonardini, royalty free