This is the year for NAB core banking overhaul


It’s taken a while, but the Commonwealth Bank of Australia’s ambitious project to overhaul its core banking system finally has a rival, with National Australia Bank flagging plans to rapidly increase the pace of its own core overhaul — with a key tranche of the project to be delivered by the end of this year.

NAB’s core overhaul — dubbed NextGen for ‘Next Generation Platform’ — has been in the works since at least August 2008, when the bank announced it had picked Oracle’s i-Flex platform as the centrepiece of its banking operations moving forward. However, unlike CommBank which has conducted the equivalent of an open heart transplant to replace its core with SAP technology over the past several years, NAB chose to dip its toe in the water first, rolling out the technology in its UBank online brand first to get some early lessons.

But yesterday, the bank made it clear that it was now accelerating the project to light speed.

In briefing documents associated with its results session, the bank indicated that it had defined the targeted operating state for NextGen, was building the platform, and had already activated some of the new platform’s functionality — such as customer analytics tools.

In 2011, the bank noted, it would deploy what it described as the “foundation release” of NextGen, as well as making a new general ledger system operational and deploying extra capability through the program into its securitisation platform.

The move represents one of the first concrete reactions by a rival bank to CommBank’s very public claims over the past year that it was stealing a march in terms of its technology platform over its competitors, through the deployment of so-called ‘real-time banking’ in its core. Neither ANZ nor Westpac have confirmed plans to overhaul their core banking systems in Australia, although ANZ is reforming its platforms internationally.

As part of its ramp-up effort, NAB yesterday revealed costs had risen in a number of areas — including general expenses, an area where it specifically mentioned NextGen was contributing to costs.

The headcount in its Group Business Services division — which includes its technology support arm — has grown substantially recently by 948 full-time equivalent roles, net of the bank’s outsourcing agreement with IBM inked last year. Overall computer costs were $202 million for the past half-year — up from $163 million for the same period 12 months ago. Software costs were also up.

In a broader sense, NAB also has a fistful of other major technology projects on the go.

For starters, the bank noted yesterday that it has upgraded 28 percent of its sites as part of a wide-reaching network modernisation project. No further details about the project were available, and the bank wasn’t able to comment this morning on which vendors are involved. The project is slated to be completed in 2011.

Also on the plate this year are an upgrade of the bank’s contact centre voice telecommunications infrastructure and a project to transform its payments systems, for example. NAB has also completed the integration of the technology systems belonging to insurance acquisition Aviva.

Image credit: Delimiter


  1. The reality of NextGen is very different to the message being presented publicly:
    – The program has been delayed numerous times, and scope is now being cut in an attempt to deliver something this year.
    – What has been delivered so far is not related to the Oracle Flex platform – it is functionality in non-core areas (e.g. customer analytics, general ledger).
    – Oracle (iFlex) has failed to deliver on time or to the quality required, and the Flex product is not ‘next generational’ .
    – The business is increasingly frustrated as NextGen has soaked up so much of the investment pool, and other projects have been put on hold.
    – NextGen budget has recently been cut back, numerous contractors and consultants let go, the relationship with Oracle is increasingly strained, and there are now rumours that the program will be canned.
    – The whole program is a lesson in how not to manage a large project.

    • Anon
      Not sure i would put the General Ledger in the “non-core” category. But never mind.

      As to your comment
      “- The whole program is a lesson in how not to manage a large project.”

      Does this mean that NAB did not learn form the ISI project or maybe the HomeSide project, or maybe CAMS in the UK project, or maybe the common front end project or, or, or.

      SIgh, there goes my pension fund.

    • Dear anon. All new ventures, particularly on a scale such as this will have problems along the way. I think it’s disgraceful that you air comments of this nature to an open forum. I can see why you chose anon as your name.

      There are many people working very hard on that project and all you are doing is belittling their efforts to deliver something so game-changing. I think snipers from within the organisation will always find fault in anything they do.

      Please send me a clue as to your identity so we can meet face-to-face and discuss code-of-conduct and how much longer you should work at nab if that’s what you do, because your attitude is not very nab-like.

  2. Reggy,

    You sound like a typical bully that would be in a position of management at this programme, and are probably responsible for a large portion of the mismanagement and cost overrun that this project faces. I can see management completely occupied with managing the message upwards while poor workers work their ass off for unachievable targets, agreed to appease management rather than to deliver anything. There is probably a stream of consultants employed as change managers – and you are immersed in their spin to the point that you have started believing it.

    The question you need to answer Reggy is whether NAB culture allows the difficult questions anon is asking, to be raised and resolved internally ?

  3. @Raval

    Not exactly – there is a code of conduct and (unfortunately) Reggy is quite right; in this case it has been breached. Should anon stop being anonymous they would probably face immediate termination or at the very least some kind of compliance gating come review time (if they’re permanent).

    Having said that anon is fairly close to the mark. NextGen is a large project that has not been particularly well managed or executed. The reason I believe this is the case is that it is an extremely large transformation project – a rare beast in Australia. No-one has attempted something on this scale this century.

    It is going to have problems – that shouldn’t be unexpected. What is unexpected (and a little unwarranted) is anon’s outburst on a public forum. There are channels through which to raise concerns internally, and, as far as I am aware, these channels work.

    @Reggy – before you ask, I am an ex-NAB employee who was involved tangentially with NextGen.

    If we’re both honest here, Raval and anon do raise some pertinent points and I don’t think they should be dismissed, but taken on board and dealt with accordingly. But I do understand your concern.

  4. F*** Y** Reggy … how dumb u r … u ask some one to reveal identity and u think they will … if u r at higher mgmgt of nextgen … no wonder prog is failing … and poor contractors who had long term contracts (said no to other contracts) were kicked off … not going back to nab unless they pay extremely high rates ….

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