SBS Bank taps Deloitte for cloud core banking overhaul

Deloitte New Zealand has been appointed implementation partner for SBS Bank's core banking transformation, following the bank's partnership with Engine by Starling, the software-as-a-service business owned by Starling Group.

The appointment marks a major technology overhaul for one of New Zealand's longest-standing member-owned financial institutions. It also reflects growing adoption of cloud-based core banking platforms among smaller and mid-sized banks looking to modernise without building systems in-house.

The work is part of a multi-year programme, which SBS Bank has positioned as a step change in how it runs operations and delivers services to members.

Core platform

Core banking systems sit at the centre of a bank's operations. They manage products such as accounts and loans, and record transactions and balances. Many incumbents across the region still run legacy platforms that can be costly and complex to change.

SBS Bank will upgrade its core banking system to Engine's cloud-native platform. It has linked the shift to planned changes across customer onboarding, accounts and mobile banking.

Members will get digital onboarding and new account features through a new mobile app. The bank also expects "smart money management features" as part of the package. Internally, it expects reduced complexity and more streamlined operations.

Deloitte will support the programme across its stages, drawing on delivery experience from Australia and the UK alongside its New Zealand team.

"We're proud to support SBS Bank on this significant modernisation journey. This programme will enable SBS Bank to deliver exceptional digital experiences to its members while building the operational resilience and agility required for the future of banking," said Grant Frear, Partner, Deloitte New Zealand.

Converge suite

Deloitte will bring Converge by Deloitte into the programme. It describes Converge as a composable suite designed for banks, mutuals and building societies.

In the announcement, Deloitte linked the suite to introducing new digital services and reducing development effort, and said it supports scaling innovation.

"Deloitte's global transformation capability, combined with local expertise, means we are uniquely positioned to help bring this vision to life. We look forward to working alongside SBS Bank and Engine by Starling to deliver a modern and resilient banking experience," said Frear.

Market shift

Large technology upgrades have historically been associated with the biggest banks, given the investment and execution risk involved. Over the past decade, specialised vendors have expanded the market for modular, cloud-hosted core banking platforms, offering an alternative to major in-house rebuilds or traditional packaged systems.

Engine by Starling sells technology developed within Starling Bank and used in its operations. For banks such as SBS Bank, combining a vendor platform with a systems integrator can reduce the need for internal software engineering, though it still requires significant data migration, process redesign and change management.

SBS Bank Group Chief Executive Mark McLean described the programme as a major step for the institution.

"We're pleased to be working with Deloitte, building on our existing relationship and their proven expertise, as we focus on becoming a more resilient and future-ready bank. Together with Engine by Starling, we have a strong partnership in place to deliver better experiences for our members, communities, and more modern ways of working for our teams," said McLean.

The programme will now move into implementation, with Deloitte working alongside SBS Bank and Engine by Starling as the bank progresses through the stages of its core banking replacement.