Technology shake-up on way for Kiwibank

RICHARD MEADOWS
Last updated 11:48 17/02/2014

Relevant offers

Money

How to survive student finances What Minecraft teaches kids about money Run with the herd at your peril Kiwis make no attempt to pay off mortgages Six tips for financially fabulous kids Auckland property owners warned Saving money by thinking of books Making ends meet on a pension Auckland prices, rentals may increase Judge me, budget me, take away my booze

Kiwibank is overhauling its core banking system, with a multi-million dollar contract with German software giant SAP expected to be announced later this week.

The state-owned bank has more than 850,000 customers and has outgrown its computer platform, which was designed for credit unions with significantly fewer customers.

Sir Michael Cullen, chairman of Kiwibank's parent company NZ Post, told a parliamentary select committee last Thursday that the bank would announce the supplier this week.

Banking sources say the winner of the contract is SAP, the world's biggest producer of business management software.

When asked to confirm the supplier, Kiwibank spokesman Bruce Thompson said "we do not respond to market and media speculation".

It remains unclear how the capital-strapped bank will finance the investment, which is likely to cost well over $100 million.

When ANZ moved on to sister bank National Bank's core platform in 2012, the cost of the technology merger was $221m.

Kiwibank is thirsty for capital, but recent requests for more funding have been rejected by the Government.

Instead, it last year adopted a new business plan tempering its expected growth, with the goal of becoming capital-self-sustaining by 2016.

The Green Party has repeatedly called for more funding so Kiwibank can compete better with the larger Australian-owned banks.

In October, Prime Minister John Key ruled out a partial float of Kiwibank, but hinted that proceeds from the sale of other assets could be used to shore it up.

Ad Feedback

- Fairfax Media

Comments

Special offers

Featured Promotions

Sponsored Content