The Commonwealth Bank of Australia (ASX: CBA) is all set for a core banking development project that will put the cost-to-income ratio for its retail banking as the lowest in the world.

The $750 million core banking platform project will allow the bank to reduce its cost-to-income ratio from 39.6 percent to 35 percent in the next three to five years. The target would place Australia's largest bank by market capitalization as the most efficient retail bank in the world.

The global cost-to-income ratio average for retail banks remains at 45 percent. Spain's Banco Santander is operating on a ratio of 36 percent. The CBA has tightly kept its retail cost ratio steadily sliding from 47 percent four years ago to 42.9 percent in 2009.

The four-year project will change the old banking system of keeping transactions “banked” overnight. The developments, one of the largest IT investments under way in Australia, will allow "real time" banking for CBA's customers.

The bank's retail customers savings accounts will be under the new technology by the end of 2010. Retail and commercial mortgages and business customers will be integrated in 2011.

According to CBA's group executive of retail banking Ross McEwan, the technology upgrade will not result in a decrease in manpower. In fact, McEwan sees “more people moving to the frontline.”