Suncorp has finally junked the full rollout of its long-troubled Oracle core banking system replacement, with the beleaguered system leaving a $90 million crater on the bank’s books.
The Queensland headquartered institution on Monday finally drew a financial line under the under-performing implementation, booking in a hefty impairment in an update to shareholders after struggling with the platform for more than four years.
“The risks associated with deploying the incomplete modules in the current uncertain environment have resulted in a low likelihood of completing the implementation in the near term,” Suncorp told weary investors on Monday.
While the retail lending, personal loans and customer collections ‘modules’ of the Oracle core banking platform are all operational, the key deposit and transactions modules – the main engine of any deposit taking institution – never made it across the line.
Suncorp’s payroll system is also under heavy scrutiny with the bank forewarning investors and staff it expects bad news after a “review of the Group’s pay and leave entitlements…identified potential incorrect payments to some employees.”
“Preliminary estimate of the costs to remediate those eligible for additional payments and the costs to implement new processes is between $40 - $70 million,” Suncorp said.
Meanwhile Suncorp’s star hire, Lee Hatton, who previously the chief executive of NAB’s pure online arm UBank and was lured across just this year to head up its banking and wealth arm, has also walked after being poached by a vendor.
“Ms Hatton has accepted a role with a Sydney-based financial technology company. A comprehensive recruitment process is underway and will consider internal and external candidates,” Suncorp said.
Where Suncorp’s tech strategy is headed post-Oracle is also a bit of an open question.
In March this year Suncorp lost its highly regarded group chief information officer Sarah Harland along with banking and wealth technology head Sharmilia Tsourdalakis.
Harland’s departure followed the spectacular exit of Pip Marlow, a former country chief for Microsoft in Australia who had been hired to push the multi-brand bancassurer API-driven marketplace project last August.
Suncorp chief executive Steve Johnston at the time essentially conceded the bank had been too ambitious with that project, with Marlow reappearing as the Australian country chief of Salesforce just days later.
More to come…