Co-op group banks on new IT

Pennell: we will offer full services

Co-operative Financial Services (CFS) is set to start a complete revamp of its hardware and software infrastructure as part of a group-wide business transformation project.

Spending for the programme, which will last for about three to four years, will exceed £150m.

The project will see new vendor partnerships providing services for a complete replacement of legacy kit. “At CFS we have a very old set of core banking technologies that were developed in the 1960s,” said Gerry Pennell, executive director for CFS’ business transformation and shared services division.

“Those systems are becoming very expensive to support, slow to get new products out to market on and cost us quite a lot of money when it comes to meeting regulatory requirements,” Pennell told Computing in an exclusive interview.

“We want to offer an integrated, complete full service and to do that we need a more modern core platform,” he said.

CFS’ banking system interfaces with internal and external software such as payment networks, general ledgers, client-facing websites and BACS systems. So the move to a new central platform is expected to be tough.

“The way the business will manage the migration will be one of the most challenging aspects of this programme. But risks will be mitigated by very detailed planning, testing and having fallbacks at every stage,” said Pennell.

“We will be very careful before doing a cutover to the new technology to be certain that we do not lose any data in the process," he said.

"The key is to integrate the software into the environment and then migrate the business onto it," said Pennell. “And if anything goes wrong, we have an existing system that is stable to back us up.”

Apart from the upgrade of its banking platform, the IT transformation at CFS will also cover systems underpinning the group’s disaster recovery and datacentre, as the current set-up is “not robust enough to support the business’ future needs”, said Pennell.

A detailed set of requirements has been issued to prospective suppliers, thought to include IBM and BT, which are now working on initial proposals for how the transformation can be developed.

“This work will review all areas of infrastructure, but the exact scope, potential solutions and possible people implications have not been fully defined or explored and nothing is, as yet, a done deal,” said Pennell.