Nationwide's £1bn IT overhaul

The financial giant is already relishing the extra flexibility it will gain though. "The SAP bank product is largely configurable so it will significantly reduce, once deployed, our time to delivery of new products," Prestedge said.

The bank also initiated a complete replacement of its mortgage origination platforms the software used by mortgage brokers and bankers to complete transactions to install a Microsoft system. The bank has already scored 6 billion worth of business on that platform. The company's CRM was also overhauled. Again, Microsoft was brought to deploy its Dynamic CRM product.

We are in the process of, having fully virtualised our server estate, working out where third party hosting would take us to.

One of the more costly parts of Nationwide's transition was the construction of a new 170 million datacentre. "We consolidated two of our datacentres and bought a new one in Newbury which is up and working, using virtualisation to position ourselves for using cloud as and when we choose to do so," Prestedge said.

With the transition, Nationwide has brought in new personnel too. This week it announced the appointment of Simon Hamilton as divisional director of a new enterprise development division. Hamilton will be responsible for application development and support across both new and legacy platforms.

Debra Bailey, an ex BT MD, will join in 2012 to lead the group services arm.

"Debra really brings together what I would call all of the infrastructure operations for the group all of our datacentres, all of our desktops, all of our infrastructure, all of our data warehouses, all of our networks as well as property, facilities and lines of business services, like cash machines and ATMs," Prestedge explained.

"She will be accountable for about a third of the group's operating expenditure."

The future

Once the project is done and dusted, Nationwide will be feeling awfully proud of itself.

"We will, once the programme is complete and deployed in 2014, be the only material banking institution in the UK which will have completely renewed not just its infrastructure, but its application estate over a five year period, irrespective of the recessionary environment," the COO added.

But once all the work is finished, what next for Nationwide? It appears the public cloud is on the horizon, along with some desktop virtualisation, as IT Pro found RBS had initiated just recently.

"We are in the process of, having fully virtualised our server estate, working out where third party hosting would take us to. I have no doubt we will use the public cloud for some applications over time," Prestedge revealed.

"[Desktop virtualisation] is something we are just taking the business case to the board for. The IT programme thus far has focused on application and infrastructure renewal, we need to make sure delivery continues and then we will drive through virtualisation and support model changes."

It seems banks aren't so afraid of the big, bad public cloud after all. More importantly, they aren't afraid of rethinking their IT for the benefit of customers in times of economic strife.