Spain’s Banco Sabadell sign $1 billion deal with IBM for it to manage the bank’s IT and cloud systems for the next ten years
Banco Sabadell, the fourth largest bank group in Spain and owner of the British bank TSB, has signed a ten year with IBM Services.
The $1 billion deal will essentially see IBM run and overhaul the IT and cloud services at Sabadell, to aid it in the digitisation and “strategic evolution of its business model.”
It comes after TSB last month fired as many as five of its staff, over claims they took advantage of a compensation system setup after its IT fiasco in 2018.
“With IBM, Banco Sabadell plans to transform its IT infrastructure to a modern technology platform that integrates all its data and applications enabling a broader client-centric view,” IBM announced.
The deal will help Banco Sabadell drive the modernisation of its IT environment.
“IBM Services will help Banco Sabadell migrate its existing applications to a hybrid cloud environment, meeting required cybersecurity standards, to help it meet continuous regulatory changes,” said IBM.
“This agreement with IBM helps enable us to advance into the modernisation and transformation of our technology infrastructure and in the simplification of our operational model,” said Miguel Montes, Banco Sabadell Chief Operations and People Officer. “With this, we are not only continuing to increase our resilience, security and scalability capabilities, but we can also adopt key elements of the new technology paradigm like cloud, the intense use of data and artificial intelligence.”
IBM intends to utilise its newly acquired Red Hat OpenShift technology, to support Sabadell in managing a hybrid cloud environment.
“We are excited to collaborate with Banco Sabadell to help advance its cloud journey that can bring innovation to meet the everchanging demands of its clients and help address the complex security and regulatory requirements of today’s financial industry,” said Juan Zufiria, senior vice president of IBM Global Technology Services.
In parallel TSB, the UK affiliate of Banco Sabadell, signed a contract where IBM will manage the bank’s technology in the UK.
It is reported that the Spanish will open a new technology centre in Edinburgh where it will handle all the British unit’s data.
This is noteworthy considering TSB was engulfed in an IT meltdown in 2018 when it moved its five million customers and their 1.3 billion records from a banking platform it was renting from former owner (Lloyds Banking Group) to its new ‘state-of-the-art’ platform developed by Banco de Sabadell.
The move saw TSB inadvertently lock up to 1.9 million customers out of their accounts.
Late last year a long- awaited report concluded that a lack of testing at one of TSB’s data centres by Sabis, the IT services arm of Sabadell, coupled with poor judgement of Carlos Abarca, the bank’s chief information officer at the time, were to blame for the IT failure.
Pester had been in charge of TSB for seven years, and his resignation pleased some MPs on the Treasury select committee.
But others felt that Pester took the blame for Sabadell, and its chaotic data migration process, which cost TSB more than £400m.
It should be noted that this is not the first time that the finger of blame has been pointed at Sabadell. Insiders have previously hinted that the blame for the botched TSB migration should be laid at the door of the Spanish bank.
An insider previously told the Guardian newspaper that Sabadell had a disturbing lack of appreciation of the complexity of the migration.
Indeed Sabadell was reportedly warned as far back as 2015 that its ambitious plan was high risk, but Sabadell pressed ahead anyway.
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