Allied Irish Bank (AIB) has signed a five year IT outsourcing agreement with Indian IT services supplier Wipro as it attempts to transform into a digital bank.
The deal is reported to be worth £150m over five years and will include staff transferring to Wipro.
The India supplier will invest in an operations centre in Dublin as well as a mainframe computing training resource.
Mike Brakes, CIO at AIB, said the deal will help the bank modernise its services. "We are pleased to be working with Wipro in our journey to transform into a digital bank."
"With Wipro supporting our technology and application infrastructure, we look forward to strengthening efficiencies and being better able to serve and support our customers across the bank."
He added that Wipro’s plan to set up operations in Dublin was an important factor in the supplier being awarded the contract. “We were very pleased with the commitment Wipro demonstrated to the Bank as well as to creating opportunities for our people in Ireland."
Wipro will be setting up a Dublin based cloud operations centre and a mainframe centre of excellence to provide career opportunities.
Outsourcing IT is seen as a way to cut costs and give banks the IT skills to transform operations. Banks are increasingly using modern technologies such as cloud, mobile and automation software to increase efficiency and engage customers in new channels.
In March 2014 the Bank of Ireland outsourced its technology operation to Accenture, which affected 200 staff.
The bank said it was working with Accenture to help it "deliver on customer needs and expectations now and into the future".
Recent research suggests banks are increasingly turning to suppliers for IT services. According to figures from accountancy company Nixon Williams, the number of jobs in the financial services sector has declined 16% since 2009, while the number of staff employed by IT firms has increased 13.9% – partly because banks are using more outsourced IT.