In a contract which could be worth up to £100 million over five years, Xansa will work with CFS to create a unified Application Development and Support (ADS) service across the whole of the business.

Xansa has been working in partnership with CFS since May 1994 when it signed a £22 million seven year agreement to develop and support the Co-operative Bank's applications. This contract was extended in May 1998 and again to May 2007. The new contract represents a broadening of the partnership to encompass the Insurance side of the business in addition to the current banking relationship. As at present, Xansa will provide the service from a blend of locations in the UK and India.

CFS currently faces the twin challenges of a highly competitive market place and an increasing regulatory environment. Creating the unified ADS service will enable CFS to respond to the regulatory pressures in a cost effective, timely manner. In addition the technology enabled business services will allow CFS to expand and enhance its product lines, improving speed to market and thereby respond quickly to competitive challenges. In selecting Xansa, CFS is able to build on the existing Banking service operation and carry out a fast-track transformation to a unified CFS-wide service.

Commenting on the announcement David Anderson, Chief Executive, Co-operative Financial Services, said: "Xansa has been successfully delivering to Co-operative Financial Services for 12 years. Their approach suits us well with their integrated delivery capability. This will support our business change agenda which is driving us towards the vision of becoming the UK's most admired Financial Services business.

"Xansa's commitment to the UK Retail Banking and Insurance sector means that they understand our market and regulatory environment. In addition Xansa's transformation expertise will enable us to create a best in class, unified application development and maintenance service under the controlling direction of our IS department."

Commenting on the announcement Alistair Cox, Chief Executive, Xansa said: "We are delighted that Co-operative Financial Services continues to choose Xansa as its partner for applications management, IS transformation and web based development. CFS represented Xansa's first ever financial services outsourcing contract and our second ever outsourcing deal, and this expansion and renewal is a clear endorsement of our excellent and longstanding relationship. It also demonstrates our commitment to long term relationships which means that CFS can count on Xansa to help deliver its vision for the future."