Commonwealth Bank's core computer systems overhaul has ballooned by A$370 million into a $1.1 billion project and has been extended by at least nine months.Claiming the project as the largest banking transition in Australian history, involving 10 million customer accounts being shifted across to the new computer system, CBA chief executive Ralph Norris said yesterday that, although the budget had increased, the overall business case and net present value of the project remained largely unchanged.Core banking represents about 30 per cent of the total investment spend of the bank.To date, the project has seen the bank switch its customer records, retail deposits and retail transactions across to the new SAP core banking platform.  According to the half yearly report, which was released yesterday, as a result of this transition, "the group now has over 11 million accounts and over $100 billion in balances operating on this platform."CBA is the furthest along in the modernisation of its core banking platform of the four majors in Australia.The transition of business deposits and transactions to the new platform is planned for later this year, while lending will transition next year.Phase II of the modernisation, which will see the new platform rolled out to CBA entities such as ASB and BankWest is scheduled for 2013 and beyond. Norris said that the $1.1 billion figure was also intended to cover this phase of the modernisation program.Asked to quantify the benefits of the new core banking platform, the bank's chief financial officer, David Craig, said that the core modernisation program was "underwriting" the bank's ability to achieve its stated ambition of getting its operating expenses to income ratio to 35 per cent. Norris said it should also benefit the bank's risk profile in the future and make it easier for the bank to roll out new offshore operations.Norris provided some insights as to why the project's scope had so significantly expanded."When you embark on large projects you start with a scope - and in some cases we are replacing systems that are 45 years old that were doing things we really didn't know they were doing. And, at the same time, the applications are being enhanced by the vendor as you are putting them in." He said the modernisation program had, for example, been expanded to allow the replacement of CBA's legacy teller system with a new SAP product. "The reason was that the ongoing maintenance of the teller system would delay our opportunity to add new products," said Norris.The bank had also decided to implement a core payments hub that is easier to maintain. This new hub will also allow much finer oversight of payments and help the bank manage its obligations regarding anti money-laundering legislation. Norris said BankWest, ASB, CBA and Indonesian payments all went through that hub "to make sure they are processed appropriately."More granular and real-time information regarding financial flow will be crucial for all the banks with the introduction of the new Basel III capital reforms. Having a real-time core banking