BankDirect ousting hurts IBM e-commerce strategy

BankDirect's move to dump its IBM solution in favour of Cardinal Network's Jade technology is a slap in the face for Big Blue's e-commerce strategy. The ASB Bank subsidiary has thrown out just about all the IBM components which provided a virtual bank over the Internet. They included key technologies Lotus Notes, Lotus Domino and Tivoli. The project is said to have cost around $10 million, and is thus another major loss for IBM, which had brought in technical experts from overseas to try to sort out the problems.

BankDirect’s move to dump its IBM solution in favour of Cardinal Network’s Jade technology is a slap in the face for Big Blue’s e-commerce strategy.

The ASB Bank subsidiary has thrown out just about all the IBM components which provided a virtual bank over the Internet. They included key technologies Lotus Notes, Lotus Domino and Tivoli.

The project is said to have cost around $10 million, and is thus another major loss for IBM, which had brought in technical experts from overseas to try to sort out the problems. There were rumours around the market a month or so ago that ASB Bank was withholding some payments to IBM because of performance issues.

The high-profile BankDirect has had a far greater response from customers than was originally planned for when it was launched last October.

It went live on May 3 with the new system, written in Jade 4.0 in just eight weeks by Cardinal, which provides the Fastnet internet banking service for ASB Bank. Fastnet is regarded by the bank as complementary to BankDirect.

BankDirect general manager Jane Freeman is soft-soaping the radical change, saying IBM’s role had finished and that it had been decided, after a period of looking at options, to bring the systems in-house. “There’s no dispute with IBM,” she says.

“We’ve transitioned the back end to be more in line with our parent company.”

She wouldn’t comment on financial arrangements with suppliers, nor on the cost of the original development.

There’s a new engine and a new database. The only thing that remains the same is the graphical interface.

BankDirect technology manager Derek Redman says the best way to meet future needs was to bring things in-house. “It’s all part of the learning curve, to take the benefits into ASB Bank.

“When we launched BankDirect we -under-estimated the amount of response. One of our issues had been keeping up with demand. We’re running to budget on the number of loans advanced.”

IBM wouldn’t comment other than to say its technology had been used successfully worldwide in similar environments.

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