Dutch banking giant ABN Amro has outsourced IT services to Indian supplier Infosys to improve its digital credentials.
Infosys will provide services in application development and maintenance, as well as testing and implementation.
The bank said the deal is to help it support changing customer habits. Infosys will work with other suppliers to help ABN Amro improve customer experience while becoming more efficient and agile, according to the bank.
ABN Amro group CIO Frans van der Horst said the bank needed to respond to changing customer habits.
“We have to keep pace with the evolving customer needs and be at the centre of their digital lives by delivering superior, personalised and fast services anytime and anywhere,” he said. "Redesigning our entire IT infrastructure efficiently and flawlessly is an intrinsic part of this journey."
Traditional banks are changing technology to meet customer demands, but often lack the IT skills in-house to do this. Outsourcing to companies like Infosys is a method of overcoming this shortfall.
More on banking IT
The banking sector traditionally had huge in-house IT teams, but costs, regulations and the pace of technology evolution has changed that, and there is now a real appetite for using third parties.
For example, Deutsche Bank recently set up a joint innovation venture with IBM, Microsoft and Indian IT services firm HCL Technologies to improve its digital credentials.
Banks need support from third-party technology specialists if they are to fend off challenger banks attempting to break into the industry with technology as a differentiator, as well as large technology companies that are increasingly offering digital financial services.
Research from the Confederation of British Industry and PricewaterhouseCoopers revealed UK finance firms are spending more on IT to increase efficiency and reach new customers, as competition and technology change the nature of the financial services sector.
Another recent survey of 2,000 people by banking software supplier Fiserve revealed 80% of people would trust a bank if it had the right technology in place. More than half (56%) said a new bank would have an advantage over rivals if its IT was reliable.
Peter Schumacher, CEO at management consultancy the Value Leadership Group, said savings banks like ABN Amro derive from working with offshore services providers, which is enabling them to invest more in critical digital transformation projects.