Aussie banks are facing the prospect of losing billions of dollars in profits as a result of a major software software update, but that hasn’t stopped them getting more involved.
Key points:Barratt Group has just announced a software update that will cause the profits of some of its bank clients to be cut by almost halfBarrath Group is the biggest Australian bank to be hit by the software updateThe bank is facing a financial squeeze as more customers switch from the old to the new softwareThe update will cost a whopping $12.5 billionThe software update will affect more than 30,000 Australian banks and will be rolled out to customers starting in the coming days, with some affected banks already facing significant losses.
It’s a big hit to some banks, with a large proportion of their customers losing up to 80 per cent of their business and many having to declare a loss of $5,000 to $20,000.
But the impact is likely to be even greater for banks that haven’t made a profit in years, or don’t have an effective insurance plan.
The changes affect some of the world’s biggest banks, including BNP Paribas, Credit Suisse, Royal Bank of Scotland and Westpac.
In its announcement, Barratt Group said it would be reducing the amount of money that would be deposited in accounts, meaning it would have to write down the losses on account balances.
Barrat Group’s CEO, Paul Withers, said the software change was a “major blow” to the bank’s customers.
“We know our customers are paying us millions of dollars a year, we have to change the way we operate,” Mr Witherst said.
“There is no question that this is a major blow to our customers.”
He said the bank would have a significant financial impact on some of those customers, adding that he hoped the bank was able to manage the situation and that the financial impact would be minimised.
“The only thing we can do now is to get as much as we can out of the bank,” Mr Juhasz said.’
We’re on our knees’The software change affects a number of banks in Australia, including Bank of Queensland, Westpac, National Australia Bank, Australian National and Macquarie Bank.
BofA, the country’s biggest bank, is facing the biggest financial hit, with the bank losing about $9.5 million in profit last year.
In a statement, Mr Wethers said that the company had already written down the loss and hoped that it would “never happen again”.
“Our goal with this software change is to improve our business and ensure we continue to grow our business,” he said.
The software upgrade affects the majority of customers at all of Australia’s largest banks, but it is most significant in regional areas, where the majority are in regional capital cities like Melbourne, Brisbane, Perth, Adelaide and Hobart.
The bank says it will make further announcements on its website in the near future.
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