IBM Clinches $700mln. Santander Deal Involving Blockchain

IBM has inked a $700 million (£545 million) agreement with Spain’s Santander to assist the latter in achieving its strategic objective of “building the most advanced IT architecture of the financial sector.” In the recent past the US tech giant has forged financial services related agreements with BNP Paribas, Lloyds Banking Group, Westpac, Mizuho Bank, the Philippine Islands, Krungsri, Crédit Mutuel and Royal Bank of Canada.

IBM has mentioned that it has entered into $3 billion worth cloud deals alone so far this year.

IBM has claimed that the five year contract will result in substantial annual savings for the bank on IT expenses. The contract involves integration of AI capabilities to implement automation of customer service, improve productivity and “enhance branch adviser expertise.”

The bank has established its own Cloud Competence Center, while working in a hybrid, multicloud environment. Regarding the Center, IBM said

“IBM is collaborating with the center in the definition of the methodologies and processes to accelerate that transformation journey. Additionally, the bank is using a range of technologies including IBM DevOps solutions and IBM API Connect, aimed to develop, iterate and launch new or upgraded applications and digital services much more rapidly.”

David Chaos, Santander Global CIO, said “We think this agreement with IBM represents a great support to our strategy of constant progress, while protecting our investments in technology. IBM’s technology will provide the bank with the flexibility needed to support the constantly evolving business of a bank.”

Spain based Banco Santander was founded in 1857. It serves both retail and business clients. In terms of market capitalization, it is the largest bank in the euro area. Banco Santander had € 981 billion in client funds (deposits and mutual funds) at the end of 2018, 144 million customers, 13,000 branches and 200,000 staff.

The announcement comes as the bank continues to shake its retail banking approach. In response to “changes in how customers choose to carry out their banking,” the bank said last month that it was closing 140 UK branches.

As the volume of transactions carried out via Santander branches decreased by 23% in the last three years, the bank decided to withdraw from unprofitable venues. Notably, in the same period, transactions via digital channels increased by 99%.