Bank claims N16B against Flexcube for Bungled Implementation

Allied Irish Bank (AIB) has begun court proceedings against Oracle Financial Services Software, claiming nearly EUR84 million (about N16 billion) over a bungled Flexcube implementation.

AIB signed for the Flexcube core banking package from Indian vendor i-flex solutions - now called Oracle Financial Services Software - in 2007 to overhaul and streamline its retail banking operations.

However, a case document filed at London's High Court this week, seen by Irish broadcaster RTE, states that the implementation was beset with technical and management problems. At the end of 2009, just 3,000 customer accounts out of a possible five million had been moved on to the new system.

AIB says that it spent €84 million on procuring and implementing Flexcube. The figure does not include any other losses during the three-year period, which have yet to be calculated.

An Oracle spokesperson confirmed to Information Age today that a suit was filed by AIB at the end of January. "All of the allegations being raised by AIB are being rigorously defended by the company, and the company will also be counter-claiming against AIB for breach of contract and outstanding fees." In March 2010 the roll out of Flexcube was abandoned with AIB forced to stick with its old system.

The bank claims it lost around EUR84 million through the project which it was induced to embark on by misrepresentation from the vendor. It is seeking the EUR84 million damages for misrepresentation and for breach of contract and negligence.