Students Loans Company signs up HCL for £50m digital transformation

The Student Loans Company has responded to criticism of its ageing IT systems with the announcement of a £50 million digital transformation project.

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The Student Loans Company (SLC) has signed a £50 million contract with outsourcer HCL Great Britain to modernise its ageing IT systems.

During a Public Accounts Committee hearing last month, MPs lambasted the SLC for the lack of digital services for its five million customers, which was blamed on “old and constrained” IT systems. At the time, the SLC revealed that government had approved a business case of £139 million, with an initial cap of £90 million, to appoint a supplier to refresh its IT systems.

The SLC has announced that it will be working with HCL, which is partnering with Misys and Deloitte, on this transformation project.

Under the contract, a new infrastructure, including a new core banking platform from Misys, will be introduced. This will help functionality for its customers, Student Loans Company CEO Mick Laverty told ComputerworldUK.

“The project enables us to go completely digital and do things very flexibly,” he said. “It means that our customers will be able to apply for loans when it is convenient for them, and via a medium that is convenient for them – be it a tablet, mobile phone, or a laptop. They will be able to do the whole end-to-end process digitally – right from application to confirmation - which is in line with what they are currently expecting from other internet banks and retail providers.”

Legacy IT problems

With the existing, out-of-date technology, the SLC was unable to provide an adequate online serice to borrowers. For example, students would have to print, manually complete and post, or scan and email change of circumstance forms, instead of being able to submit information directly online.

Laverty said that the PAC comments were “reflecting the current state of play: we have old IT systems that are barely fit for purpose and that causes us problems”.

The old infrastructure hadn’t had investment for “quite a number of years”, he said, and was brought in at a time when the SLC had a smaller number of products and lower volumes of transactions.

“That was all on antiquated infrastructure which needs constant TLC, and is very inflexible and difficult to put new things on quickly," he said.

Systems migration

The SLC has now begun the process of implementation of the new systems centred around a Misys BankFusion platform and replacement general ledger. This process will take around 12 months, and will be followed by phased migration with new customers enrolled first, before returning customers and repayment customers are added onto the system.

The IT transformation will also involve HCL introducing a security access management layer (SAM), as well as the possibilty of implementing a business rules engine (BRE), business process management (BPM) and integration software capability, which would be built in-house. 

“It is always a challenge and it will be done carefully – we won’t go for a big bang approach. In fact we have taken an agile approach to this whole project,” he said.

“When we bring the banking platform and security platform we will make sure that our 300,000 new customers each year are on the system, and that it is working well and behaving as we would expect it to.

“We will also start migrating the old customers progressively over a longer period of time, so there will be a migration plan that is phased and will deal with new customers, returning customers, and then repayment customers – probably in that order.”

Responding to policy changes

The new system will also allow the SLC to react more quickly to changes being made in Whitehall, said Laverty.

“For our paymasters and stakeholders in government we will be able to offer them the ability to very quickly translate policy into action,” he said.

“Quite often the government would like to change the rules around student finance, or just change the rules around products and programmes that we might do for them, and unfortunately the current system there is a long lead in time.

"In future we will be able to react very quickly to those tasks, and be able to operationalise that policy substantially quicker and cheaper than we currently can.”

Laverty added that the new platform will also meet the expectations of its - typically young - customer base.

“If you look at our customers, quite a lot of them are technology-savvy who are used to transacting business on mobile devices, on the move; the vast majority of our customers are of a generation that expect that.

"Of course we have a more traditional approach and system which have fallen behind those expectations, but we want to be customer-focused, and we have to meet those expectations by going digital. If that helps us save money then that is a bonus for us as well.”

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