The Co-operative Bank plans to invest in IT systems to help its recovery following a troubled year.
In its annual report - where the bank posted a £1.3bn loss - the Co-op stated it would invest in IT systems in order to “fix the fundamentals.”
The Co-op Bank will implement customer-facing technology to “deliver branch-based and digital banking in a way that meets our customers’ expectations". It also stated that the bank is improving and consolidating back-office systems to make products and operations more resilient, faster and more efficient.
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"Behind the scenes we are improving and consolidating the systems that support our products and operations making them more resilient, faster and more efficient," said the annual report.
Chief executive of the Co-operative Bank, Niall Booker, said: “It is early days but initial progress on our business plan is encouraging and we remain enthusiastic about the long-term potential for the bank. We have started to simplify the business; we are reducing costs and are currently ahead of schedule in de-risking our assets. We are also beginning to fix the fundamentals of the bank as we drive the change needed to return to our roots as a bank focused on our retail and SME customers.
“In the future, we will be investing in IT to both deliver digital banking in a way that meets our customers’ expectations and also improve the systems that lie behind our products.”
The results also included £148.4m of IT write-down costs which were announced in its half-year results last year.
In September the bank was forced to ditch its plan to migrate its core banking system to an off-the-shelf system from Infosys. The platform, known as Finacle, was put on hold for a year and was then terminated resulting in £148m in IT costs
The bank still depends on its parent, the Co-operative Group, to provide its IT functions. The report stated that one of its "key strategic risks and uncertainties" was the need to significantly overhaul its IT.
“The required improvement and re-engineering of the bank’s IT platform and operational process is significant in scale, complexity and cost. Any delays in, or failure by, the bank to deliver the re-engineering of the bank’s IT platform may result in significant additional investment costs, subject the bank to further regulatory scrutiny and impact the bank’s ability to deliver its turnaround strategy,” it said.
At the end of last year, the bank set aside £500m for a four-stage IT transformation, following the announcement of a £1.5bn rescue plan. The four phases: remediation, digital catch-up, simplification and strategic optimisation, were set to begin this year.
Last month, The Grocer magazine reported that a programming error contributed to £400m of unforeseen costs at the Co-op Bank.