Fintech
The Italian Antitrust ruling stops Intesa Sanpaolo’s fintech ambitions
In a turning point for Italian banking giant Intesa Sanpaolo, its digital expansion plans through Isybank have hit a roadblock following an antitrust ruling. The decision, issued by the Competition and Market Authority, requires explicit consent from the approximately 4 million customers who intend to migrate to Isybank based on their digital behavior. This ruling effectively blocked the migration process for existing customers.
As reported by Yahoo Finance, Intesa Sanpaolo has encountered notable setbacks in its migration efforts, with only around 350,000 customers transferred, far short of its original target of 2.3 million by March. However, the bank remains steadfast in its goal of acquiring one million new customers through Isybank by the end of next year.
Massimo Proverbio, Chief Technology Officer of Intesa Sanpaolo, highlighted that although the delays have affected the bank’s commercial strategy with existing customers, the digital transition to a cloud-based IT infrastructure has progressed smoothly. “Things went very well: the infrastructure proved to be reliable, we tested it successfully on 20 million accounts,” said Proverbio.
Isybank, Intesa’s digital-only division, leverages core banking technology provided by London-based Thought Machine, which also works with other major financial institutions such as Lloyds and Standard Chartered. Isybank operates on cloud services provided by Alphabet and Telecom Italia, following a strategic agreement in 2020.
The European banking landscape is evolving rapidly, with regulators urging institutions to prioritize technological advances to remain competitive. As consumers increasingly gravitate towards digital services, traditional banks face growing competition from digital champions like Amazon and Apple.
In response to these market dynamics, Intesa Sanpaolo has invested heavily in IT infrastructures, with expenses exceeding 3 billion euros in the first quarter alone. The bank aims to capitalize on cost savings from its fintech strategy, with projections suggesting a potential 3.3 percentage point increase in return on tangible capital by 2026.
Despite challenges such as the shortage of technology graduates in Italy, Intesa Sanpaolo has strengthened its internal IT capabilities by recruiting 1,800 specialists. This strategic move reflects a broader trend among European banks, with rivals such as UniCredit increasing IT investments to adapt to the digital age.
Source: Yahoo Finance