Nick HuberThe merger between Barclays Bank and the Woolwich will stretch
the scalability of the Woolwich's online banking services,
consultants warned this week.
Barclays' £5.4bn offer for the Woolwich was recommended by the
Woolwich board last week and has been broadly welcomed by IT
analysts. They have stressed that the shared back-office systems
used between the two groups, such as IBM mainframes, will help the
three-year integration plan.
But consultants have already raised concerns over the volume of
customers that the Woolwich's online banking and mortgage service,
Open Plan, can handle.
Open Plan currently has about 290,000 customers, compared to
more than a million customers for Barclays' online banking
service.
"One of the issues has got to be scalability," said one banking
industry consultant. "The Woolwich appears to be very robust but
you're looking at a customer base of 16 million. It will have to a
very well architected system."
And Barclays will also have to integrate IT networks with the
Woolwich only months after it announced its own three-year IT
overhaul covering e-business, outsourcing and customer relationship
management systems.
According to an internal Barclays strategy document (Computer
Weekly, 13 July) this change is driven by the fear that Barclays
has missed first-mover advantage in the e-banking and e-business
sector.
The merger document agreed by Barclays and the Woolwich says it
will combine back-office processing and call centres to create a
"centre of excellence" for each key back office activity. But it
remains unclear whether it will feed Open Plan's front-end system
into its own back-office system or run it from the Woolwich's
existing back office.
And the target for integrating the IT systems within three years
appears optimistic in comparison with previous banking industry
mergers. Lloyds and TSB will finally integrate their IT systems by
the end of this year, five years after the merger.
Both Barclays and the Woolwich refused to comment on their plans
for IT integration.
Barclays' suppliers include Oracle and Andersen Consulting,
which will help providing e-procurement services.
The bank runs IBM S/390 mainframes with IMS and DB2
applications.
Key goals of Barclays' internal IT shake-up include rolling out
thin-client technology to 3,000 branches this year. Dell PCs will
be used as dumb terminals, with a mixture of IBM, Sun and HP
servers.
Barclays will also integrate legacy systems into its branch
network, Internet banking and proposed wireless application
protocol and telephone banking services.
Using Java middleware running on an IBM Websphere application
server and Oracle database
Woolwich suppliers
Include Microsoft, Intel, and Unisys.
IBM mainframes, databases and operating systems
Barclays/Woolwich merger
- Predicted IT savings of £10m out of total savings of £150m, by
the end of the third year
- Merged Barclays and Woolwich group will have 16 million retail
customers and will be one of the largest financial services groups
in the UK
- Merged group will have 1.5 million online customers