‘People’s bank’ technology promises 30% cheaper services: Anderton

Using the latest technology means the proposed 'people's bank' can offer services 'up to 30% cheaper' than its rivals, says deputy prime minister Jim Anderton.

Using the latest technology means the proposed “people’s bank” can offer services “up to 30% cheaper” than its rivals, says deputy prime minister Jim Anderton.

Anderton says the NZ Post-based bank will offer “all the main personal banking services, Eftpos, cheque books, mortgages, as well as phone and internet banking”.

The deputy PM told trade unionists this week that the bank will charge fees “that are up to 30% cheaper than the average at existing banks” but will still make a profit after three years.

“It will use the very latest technology. The overseas banks are all stuck with old-style computer systems that are very expensive and difficult to update to new technology. The new bank is going to enter the market with state-of-the-art software that is much cheaper and more flexible.”

NZ Post this month announced longtime supplier Datacom and Melbourne-based banking software company Ultradata as “preferred supplier” of the platform and retail banking software respectively for the new bank’s IT infrastructure.

But New Zealand Post spokesman Alan Dempster says installing the hardware and software necessary to offer all the promised services will be a “huge” task before the scheduled launch early next year. Hardware has to be integrated with the software, which while already being used in Australian building societies will need special New Zealand features.

“Really, we are going to have to be heads down for all of that [period until the launch] right through to next Christmas to say we have done it and we are launching the bank,” he says.

Dempster says contracts will be finalised within two months and NZ Post faced “101 detailed stages” in creating the bank.

The government budgeted $80 million for the bank, but Dempster says that was a total capital funding requirement, not just the capital purchases budget. Contracts have yet to be fixed and maintenance details settled, and NZ Post is declining to reveal a total IT spend. But it will include “hundreds” of terminals for up to 320 NZ Post outlets.

The bank aims to be “largely separate from NZ Post, but we will be leveraging off its infrastructure when we can”, Dempster says. It hopes for some IT linkages.

The NZ Post implementation will run on IBM Unix-based P series and RS/6000 platforms at Datacom’s Wellington office. Terminals connected to the system from Post Shop outlets will be of a generic workstation type.

The supposed cost savings appear far more optimistic than those predicted by Massey University banking expert David Tripe. Tripe recommended NZ Post purchase an “off the shelf” IT system, but told Computerworld late last year that this would still cost “tens of millions” and bring transaction savings of just 10%.

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