News & Insights for the AI Journey|Friday, March 22, 2019
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IBM Extends $3B Cloud Streak, Signs Santander to 5-Year Deal 

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IBM continued to make inroads into the big bank sector, announcing this morning at its annual Think conference in San Francisco that Banco Santander, the fifth largest bank in Europe with approximately US$1.4 trillion in total assets (as of 2017), has signed a $700 million, five-year global technology digital transformation agreement focused around implementing the bank’s hybrid cloud strategy.

Santander joins a list of financial institutions that have contracted with IBM for hybrid cloud offerings and services, including Bank of the Philippine Islands ($260 million), BNP Paribas (an eight-year-deal for an undisclosed amount), Westpac, Lloyds Banking Group, Crédit Mutuel, Krungsri, Royal Bank of Canada, and Mizuho Bank. Additionally, ICBC Argentina has announced a five-year, US $63 million agreement with IBM Services, “focused on redefining the bank’s customer experience with IBM Watson and IBM Cloud,” Big Blue said, adding that 19 out of the top 20 Fortune 500 banks and financial institutions use IBM Cloud.

In other business sectors, IBM last week announced a multi-million dollar agreement with Smart Energy Water, which provides SAAS customer engagement and analytics tools to utility companies. It follows IBM Cloud contracts with Vodafone ($550 million) and France's largest bank, BNP Paribas.

In total, IBM says it has secured more than $3 billion in cloud deals in 2019.

IBM said Santander is building a new IT architecture as a foundation for its hybrid cloud environment and has formed its own Cloud Competence Center. “IBM is collaborating with the center in the definition of the methodologies and processes to accelerate that transformation journey.” Additionally, the bank is using IBM DevOps solutions and IBM API Connect, “aimed to develop, iterate and launch new or upgraded applications and digital services much more rapidly.”

The bank will also use IBM Watson to incorporate AI capabilities aimed at improving customer experience, enhance branch advisory expertise and increase employee productivity.

“This is part of a much larger trend taking place across the banking industry,” IBM said in its announcement. “Banks today face a number of unique challenges: customers are demanding more customized services, while security and regulatory guidelines are making data governance more complex, and data and workloads are spread across many different cloud and on-premises environments. But a new-found confidence is emerging as more banks move to adopting hybrid cloud solutions…, the secret sauce to rapid innovation.” IBM cited a finding, without attributing the source, that banks that have outperformed their peers are 88 percent more likely to include hybrid cloud adoption as part of their overall business strategy.

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