IBM has announced two major core banking modernization projects in Europe using hybrid cloud technology. Rural Services Informaticos (RSI), a Spanish banking IT services company, will use hybrid cloud technology and industry expertise from IBM and Red Hat to enhance its digital product and service offering through a platform called Cloud Office.
RSI provides core banking services to the Caja Rural Group which has a network of over 46 cooperative banks and rural financial entities. The RSI banking platform serves 8 million end users. The bank services company will use the new IBM Z16 mainframe which is expected to reduce energy consumption by 25% and reduce CO2 emissions, helping the bank achieve its sustainability goals.
Europeans have a lot of focus on ESG, says Shanker Ramamurthy, global managing partner for banking & financial markets at IBM. “The amount of energy used by data centers is incredible; the opportunity to move to IBM Linux can lead to massive savings from an energy standpoint.”
The IBM Z16 also has an integrated on-chip AI accelerator designed to analyze transactions in real-time at scale to more efficiently detect and prevent financial fraud. In Italy, IBM has signed a four-year agreement to help BPER Banca Group accelerate its development into a truly digital business.
“The banking sector is undergoing rapid transformation and the benefits and potential emerging today from the dynamics of technological innovation are vast,” said Elvio Sonnino, deputy general manager and chief operating officer at the bank. “The collaboration with IBM will allow us to implement important technological improvements, to achieve greater process synergies and to develop a quality omni-channel service offering, to respond more effectively to the growing needs of customers.”
The banking group is expanding its business model to prepare for the digital future alongside a focus on ESG and the integration of its latest acquisition — Italian bank Banca Carige. To meet the needs of digitally savvy customers, new AI-powered software capabilities will be combined to develop personalized digital services across multiple channels. This allows Gruppo BPER to unlock new value by expanding the volume of digital products sold through automated travel.
IBM has developed capabilities around core transformation to help clients, especially large financial institutions, with that journey, Ramamurthy said. Three to four years into the journey, the pace is accelerating, he added. The company has built vendor relationships with more than 125 ISVs including firms such as Thought Machine, FIS, Temenos and SunTec in the core banking system.
“Changing the core system is very complex,” he added. “The biggest challenge, especially given today’s macroeconomic backdrop, is that most clients cannot make long-term investments to put a lot of money into it with payback in three to four years. It’s all about time for money — how to modulate it using a small, sharp team that can unlock economic value through progressive modernization rather than rip and replace.”
IBM offers a secure cloud, IBM Cloud for Financial Services, to meet the demands of the financial industry, he said.
“It leverages the security and regulatory capabilities that we at IBM have invested in, using Red Hat and Open Shift to enable workloads to move based on their security and manage them in an integrated manner. Highly regulated workloads cannot be handled by the standard cloud.”
Both BPER BANCA and RSI will use IBM Cloud for Financial Services with built-in security and compliance controls designed to help companies manage regulatory barriers that hinder IT landscape and application modernization. Supported by more than 125 technology and FinTech partners, the platform is designed to accelerate the transformation of financial institutions while helping to reduce third- and fourth-party risk throughout the supply chain, the company said in its announcement.