Spain’s Banco Sabadell has selected IBM for a 1 billion euro ($1.11 billion) overhaul of its IT systems over the next ten years.
Miguel Montes, the bank’s director of operations and people, said the bank wants to makes its computer systems leaner and more efficient to handle more data and transactions from customers´ mobile phones.
The bank intends to set up new services for its customers such as account aggregation, credit risk assessment and cash pooling, he said, adding Sabadell will pay around 100 million euros a year to IBM.
IBM is offering hybrid cloud services developed by its recently acquired Red Hat unit, said Marta Martinez, IBM’s head for Spain, Portugal, Greece and Israel.
IBM Services will help Banco Sabadell, Spain’s fourth largest private banking group, migrate its applications to a hybrid cloud environment, meeting required cybersecurity standards, to help it meet continuous regulatory changes.
Traditional banks are investing huge amounts to upgrade their IT systems to keep up with the rising competition from new on-line banks which, with no branches and no physical infrastructure, are able to offer cheap, mobile-only banking services.
IBM will also help Sabadell’s U.K. bank TSB, which experienced severe IT glitches in the past years.
The bank will open a new technology center in Edinburgh where it will handle all the British unit’s data. Banco Sabadell has assets in excess of 220 billion euros, a network of more than 2,400 branches and has earned the trust of 12 million customers.
IBM said it generates $20 billion in annual cloud revenue. IBM has a global network of more than 60 cloud data centers across 19 countries and 18 availability zones across 6 regions. IBM competes with Amazon Web Services (AWS), Microsoft, Google Cloud, Oracle, among others.
Financial institutions such as BNP Paribas, Bank of America, Westpac and others are already working with IBM on their public cloud journey. BNP has strengthened its ability to subscribe to “As a Service” IT services through the IBM Public Cloud.