Old Mutual has terminated a key IT contract in an effort to keep a lid on the spiralling cost of its £450m UK transformation programme.
The FTSE 100 firm is in the process of revamping its systems to better enable its financial adviser community to access its products and services.
It had previously contracted administration and technology services firm IFDS to deliver the changes, which were set to be completed by the end of 2018.
However, after IFDS warned its costs were spiralling and it anticipated delays in delivering the programme, Old Mutual today announced it has dispensed with services from the firm, replacing it with Edinburgh-based fintech firm FNZ.
Old Mutual said IFDS costs "would have been materially greater than those advised to the market in October 2016".
Group chief executive Bruce Hemphill said today's decision "shows decisive action", while Old Mutual Wealth's chief executive Paul Feeney added:
Given the cost, effort and time already invested in the programme, we have not taken these decisions lightly. This has been a difficult journey for all stakeholders.
We have made tough decisions today but we believe they are the right decisions for our customers, their advisers, our business and our shareholders.
Old Mutual has already spent £330m on work to date and said it will cost between £120m to £160m for FNZ to complete the work.
FNZ will be able to deliver the project on the same timeline. Although the top end estimate of costs is more than previously estimated, Old Mutual highlighted the FNZ package will offer "additional functionality that was not included in the previous arrangements".
Old Mutual said such add-ons would have otherwise cost the firm a further £50m and taken a further two years post-migration to deliver.
Instead of delivering a bespoke package to Old Mutual, FNZ will develop some of the technology it provides to the likes of HSBC, Standard Life and ANZ and tailor it to the financial services giant's needs.