The failure rate for IT projects is 60 to 70 per cent, according to a leading technology services company executive, and the bigger the project the more likely it is to fail.The global chief technology officer for banking and credit services at CSC, Paul Leadbetter, said this was the failure rate when he came into the industry in the 1980s and nothing has changed since then.Leadbetter said failures were caused by poor communication, poor alignment of business and IT goals, and the failure of the technology to deliver results.Another big issue was changes in the strategic focus of the business over the life of the project. What was delivered at the end of the project would always be a little out of date. A core banking system upgrade, which might have a project life of five years or more, was particularly vulnerable to this type of failure.Like other representatives of IT companies speaking at the Banktech conference in Sydney this week, Leadbetter said he was a fan of the incrementalist approach to bank IT upgrades, rather than the "big bang" approach of a full core system upgrade.However, this delineation between the rip-and-replace and incremental approaches appeared simplistic when the bankers at the conference actually described their systems. Westpac's chief technology officer, Sarv Girn, described his bank's approach to IT as a hybrid of the two styles. "In some areas we are modernising our systems, but, in some cases, where we want to make step changes, the incremental approach is too slow."Girn said the idea of what constituted the core system has also changed. "The core used to be transactions and savings. Now it is wider and includes mobile. It is where the customer sees value."ANZ's chief information officer, Anne Weatherston, said her bank had more of an incremental approach."You can remediate; you can transfer. You can tailor the pace of development to your different businesses," she said.But, at the same time, ANZ is developing a new global platform for payments, with transactions in real-time.Gartner analyst David Furlonger said 41 per cent of banks were replacing their core systems. "What is driving this is that the business managers are saying to their IT departments that their banks are not delivering product fast enough. They want more flexibility in product design and delivery, and they want more control over the channels and markets they use," Furlonger said.He said the problem with a core system redevelopment was the time it took to get it done."Technological development is a form of disintermediation. Consumers will increasingly customise their banking services, using a variety of devices."It is almost impossible for banks to design core systems today that will anticipate changing customer demand a few years from now."The executive general manager of banking IT at Suncorp, Ashok Lingutla, said that innovation was disruptive whichever way an organisation went about it. Lingutla said: "Competitors and new entrants see inefficiencies in the market-place and they try to dislocate that market."The established players are causing dislocation of their own by