The Yorkshire Building Society (YBS) plans to recoup some of the £21m spent developing its own banking system by offering it to other societies on an application service provider (ASP) basis.
The society began developing the system in-house in the mid 1990s and has now formed a subsidiary, Yorkshire Key Services, with Hewlett Packard (HP) to offer it as a managed service.
Three societies are already close to signing up for the service and Leeds & Holbeck building society is in the middle of deploying the system.
Rob Jackson, operations director at YBS, explained that the service will allow smaller building societies to use up-to-date systems without the cost of doing it themselves.
"By sharing hardware, some underlying licences and technical support it is possible for smaller societies to have a much more technical system," he said.
Yorkshire Key Services will offer a system that enables other societies to run front-office systems, mortgage and savings applications and financial and management software.
It was originally built in the Oracle development environment and runs on HP hardware. YBS has been using the system in-house for its own 1.8 million customers since the late 1990s.
"It is a completely integrated system with one overall database with details of what our customers do and a detailed log of what contact we have had with them," said Jackson.
"There is an element of customer relationship management, and it gives a highly automated view of the customer."
Prices will range from £200,000 to £1m a year, but Jackson warned that YBS won't get a fast payback on the investment. "It is long-term," he said. "It isn't going to turn around a profit for five or 10 years."
Despite the poor take-up of the ASP model, Jackson claimed that the building society is not worried about launching the service.
"Virtually all small societies were run on a bureau service in the 1960s and 1970s," he explained. "It is not a new idea and is just coming back around again."
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