Financial Objects - which recently recommended a takeover offer from Swiss rival Temenos to shareholders - says the three phase implementation is already underway.

The move will see Rabobank's 10-year-old legacy system - called Sky - migrated to a Microsoft .Net platform. The system will be delivered to users through a Web portal using Microsoft technologies.

The vendor says the system will allow 1000 users to capture, monitor and report credit exposure and manage collateral operations against global limits.

Simon Calvert, head of risk IT, Rabobank, says: "Given that we wanted to retain the same level of business functionality available in Sky, a joint development project soon became the obvious choice. We expect to make significant savings compared to the cost of implementing an alternative system from scratch, while retaining what we consider to be superior functionality."

The first phase of the implementation - scheduled to be completed next summer - will see the development of a core platform. This will be followed by further integration and implementation of the PFE analytics module as well as the development of the reporting functionality and user interface.

"By employing Financial Objects' proven migration methodology and experience we can have a future-proofed system, utilising the latest Microsoft technologies, to significantly reduce our total cost of ownership, in particular the cost of deploying the system to new users and ongoing support costs," adds Calvert.

Earlier this month Swiss banking system vendor Temenos made a cash offer of 60 pence per share for Financial Objects which was recommended by the London vendor's board and 47% of shareholders.

The deal values Financial Objects at £27.2 million ($54.01 million) - a premium of 90% over its closing price of 31.5 pence on Wednesday.

In May Financial Objects warned that its financial performance in the first half of 2008 will be "significantly behind" that recorded in the same period last year.