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IBM announced that it will take a controlling stake in the IT services delivery arm of Dexia, the European banking group majority owned by the Belgian and French states, to build and manage the IT infrastructure of Dexia and several other financial institutions, mainly in Belgium. IBM will move these companies onto a cloud-based delivery platform, renaming the operation “Innovative Solutions for Finance”. This gives IBM control over additional contracts worth US$1.3bn over seven years.
This echoes HP’s deal with the IT arm of Yorkshire Building Society, bringing the Leeds Building Society in as the first customer for its cloud platform, see here.
Throughout the UK and Europe, large financial institutions are looking to reduce costs and to increase focus on their core activities of banking, trading and insurance. A clear option for them is to hand over control of some or all of their IT function to a scale-advantaged, well-resourced specialist. Such a move could guarantee an immediate reduction of cost, a clear route to a more modern architecture and a better use of capital and cash. In return the vendor boosts his order book and scale, accessing a potentially lucrative long-term relationship.
Expect more deals like this in the New Year.
Learn more about our new FinancialServicesViews research stream here.
