Banco Santander S.A. has signed a five-year global technology agreement with IBM for the faster and deeper digital transformation of its business processes.
Banco Santander S.A., a Spanish multinational commercial bank and financial services company, signed a five-year global technology agreement with IBM valued at approximately USD 700 million to enable the group in the faster and deeper digital transformation of its business processes. In the digital transformation process, IBM will provide artificial intelligence, blockchain, and big data technologies along with an integrated data security solution.
Prashant Padghan, Team Lead, ICT Practice (Digitalization & Smart Infrastructure), at MarketsandMarkets™, shares his point of view as mentioned below:
The BFSI vertical makes use of high-end digital technology to make transactions secure, simple, and error free. The implementation of digital technology in financial services has enabled the development of solutions, such as mobile banking applications, omnichannel banking, and digital banking analytics, which help streamline and automate digital banking operations. The development of advanced technologies has led to an increased need for the integration of data from websites, web portals, and mobile-based apps, which can be achieved with the help of digital transformation. Cloud computing in the BFSI sector has enabled cost reduction and improved flexibility, as investments in new hardware or software are not required.
MarketsandMarkets™ forecasts the global digital transformation market size to reach USD 493.4 billion by 2023, growing at a significant CAGR of 19.1% from 2018 to 2023, owing to the rapid growth of digital services, such as collaboration solutions, mobile banking apps, and devices for various banking applications.
Outlook of Digital Transformation in the BFSI Industry
The mode of service has been digitalized significantly in the BFSI vertical due to the growing influence of digital technologies on consumers. The BFSI sector’s initial step toward digital transformation took place in online banking services. Over the past few years, the sector has witnessed significant digital transformation in business processes with the help of cognitive solutions. For instance, IBM cloud and cognitive solutions enabled bank clientele to quickly and conveniently access existing services, including opening bank accounts, processing debit & credit cards, teller services, and wealth management. Apart from enhancing transaction speed by more than 55%–60% at ATMs and tellers, digitalization also benefits banks with improved hardware for memory, processing, and storage.
The collaboration between IBM and Banco Santander S.A. is expected to generate value in terms of delivery of innovative services and improved customer experience using IBM Watson. The agreement also helps Banco Santander S.A. to enhance its hybrid, multi-cloud capabilities and drastically reduce the cost of operations and improve the flexibility of data handling. In addition, the use of IBM’s security tools ensures the highest level of commercial security for data, applications, and services. IBM’s security tools safeguard banking mobile applications and incident response which will help Santander strengthen security for its customers and related operations.