Nationwide'srescue
of Dunfermline Building Societyshould pose
few IT challenges, industry analysts predicted this
afternoon.
Nationwide, which has spent millions developing a
state-of-the-art IT system, took over Scotland's largest
building society in the latest credit crunch rescue deal this
morning.
As part of the deal the government will take on £1.5bn in
"toxic" commercial property loans and mortgage debt from
Dunfrmeline Building Society.
Nationwide is investing £300m in a SAP-based banking platform,
dubbed Voyager, which will make it easier to transfer customer
records from Dunfermline Building Society to Nationwide's core IT
systems, said industry watchers.
Nationwide has a track record of integrating customer records
into its core IT systems, following its takeover of the Portman
building Society in 2007 and the Derbyshire and Cheshire building
societies in September last year.
Nationwide integrated the customer data from the Portman
Building Society with few difficulties. The main challenges were
more to do with maintaining good customer relationships between
customers of building societies with very different demographics,
said Chris Skinner, chief executive of
Balatro.
However, Dunfermline Building Society's IT record is patchy. The
society was forced to write-off £9.5m on £11m profits last year
because of a failed IT project.
"It is never easy to take one company's propriety systems and
input them into your own, no matter how modernised they are. But
Nationwide has been on a massive great change programme. That
should make it much easier than if it had legacy systems," said
Skinner.
"The challenge will be transferring data in a seamless way so
the customer does not see the gaps.
Abbey had huge problems [integrating with Santander], with some
customers not receiving their bank cards for three months.
"You need rigorous user acceptance testing and training, and
further testing before you go live. Ideally you go live over a bank
holiday weekend."
Bob McDowall, senior analyst at TowerGroup, said it was likely
that Nationwide would need to run Dunfermline's IT alongside its
own systems to help the government manage Dunfermline's toxic
assets.
"They will need to keep the old systems running alongside
Nationwide," he said.
Nationwide's programme to replace its core systems, which were
based on Fujitsu and Unisys mainframes, will deliver new systems to
manage banking products by 2010, and will replace core systems by
2012.
According to its half-yearly report, Nationwide has completed
the migration of all savings and balances from Portman to
Nationwide, and plans to migrate mortgages by early 2009 as part of
a programme to make cost savings of £90m by 2010.
Nationwide said it was too soon to say what IT integration
challenges it would face with Dunfermline Building Society.