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By Suzanna Kerridge, 25 February 2002 16:30

NEWS BACS, the UK's largest automated clearing house for banks, is to invest £75m on a complete technology overhaul to help it cope with increasing demand. BACS (Bankers Automated Clearing Service) will invest the money over the next five years in the four-part NewBACS strategy to upgrade its software and hardware, and to replace its out-of-date telecoms network with an internet-based delivery channel. Last year, BACS handled 3.5 billion payments including salaries and direct debits. This is set to increase to five billion by 2006. Martin Wilson, NewBACS programme manager, said: "The NewBACS system will provide the infrastructure that will enable us to introduce an IP-based delivery channel to provide businesses with the ability to track submissions online and receive reports direct to their desktops as opposed to the paper based ones they get now." BACS currently handles financial transactions directly for 400,000 business and through 600,000 bureaux and banks. On a peak day the systems handles 60 million transactions. Phase two of the project, which will go live in 2003, will offer customers the ability to maintain and update their own data. Phases three and four, which involve an upgrade to BACS' payment processing systems, are expected to be launched in 2004. The contracts have been awarded to five partners - Accenture, BEA Systems, the Concise Group, Oracle and Sun Microsystems. Accenture will provide global financial services infrastructure while BEA has been asked to develop the transactional applications and core business systems. Oracle will supply its latest database, Oracle 9i, and its Real Application Clusters to build upon the enterprise architecture developed by Concise. Nigel Woodward, financial services business development manager at Sun Microsystems, said: "BACS' current system is fairly established so it needs to be changed to provide a lot more flexibility in how micropayments are made." The contract marks a big win for Sun's high-end SunFire 15000 server.