Italian Antitrust Ruling Puts Halt on Intesa Sanpaolo’s Fintech Ambitions
In a twist for Italy’s banking giant Intesa Sanpaolo, its plans for digital expansion through Isybank have hit a roadblock following an antitrust ruling. The decision, delivered by Italy’s competition authority, demands explicit consent from the approximately 4 million clients intended to be migrated to Isybank based on their digital behavior. This ruling has effectively stalled the migration process for existing customers.
According to reports from Finance Yahoo, Intesa Sanpaolo has encountered significant setbacks in its migration efforts, with only around 350,000 customers shifted, far below its original target of 2.3 million by March. However, the bank remains resolute in its objective to onboard one million new clients through Isybank by the close of next year.
Massimo Proverbio, Chief Technology Officer at Intesa Sanpaolo, emphasized that while delays have impacted the bank’s commercial strategy with existing customers, the digital transition to a cloud-based IT infrastructure has progressed smoothly. “Things have gone very well: the infrastructure has proven reliable, we’ve successfully tested it with as many as 20 million accounts,” Proverbio stated.
Isybank, Intesa’s digital-only arm, leverages core banking technology supplied by London-based Thought Machine, which also collaborates 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 advancements 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 infrastructure, with expenditures 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 equity by 2026.
Despite challenges such as a scarcity of tech graduates in Italy, Intesa Sanpaolo has bolstered its in-house IT capabilities by recruiting 1,800 specialists. This strategic move reflects a broader trend among European banks, with rivals like UniCredit also ramping up IT investments to adapt to the digital age.
Source: Finance Yahoo
