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Three banks in Finland have come together to create a shared core banking platform as part of their biggest ever IT project.
The deal to transform digitally sees chosen IT supplier Cognizant expand its resources in the Nordic region through the acquisition of an IT supplier owned by a group of banks.
Savings Banks Group, Oma Savings Bank and POP Bank have outsourced the building and operation of the platform, which will manage 10% of total deposits and loans in Finland.
A significant portion of core banking systems are not areas that help banks differentiate, so sharing them can improve efficiency. To this end, Cognizant signed a deal that will see it create and run the shared platform for the banks, as well as support the banks individually on their digital strategies.
The service provider will acquire current technology services provider Samlink, which is 42% owned by Savings Banks Group along with other banks with smaller shares.
Tomi Närhinen, chairman at Samlink, said this is the most significant digital transformation project to date for all the banks involved. “This is part of a bold initiative that will allow us to automate processing and offer our customers a wider range of products,” said Närhinen.
“We needed a strategic partner with global scale, as well as proven success in modernising banking IT systems and delivering the type of robust capabilities required to foster our collective digital transformation goals, a key part of which is the core banking platform renewal.”
Despite most of Cognizant’s staff being based in India, it still has a strong regional presence. In 2016, as part of a deal with Norway-based financial services firm Storebrand, Cognizant expanded its delivery and operations in Europe through a centre in Vilnius, Lithuania. This centre became Cognizant’s technology centre of excellence for financial services in Europe.
Read more about financial services IT in the Nordics
- Norwegian financial services firm becomes the latest Nordic-based organisation to sign a major IT outsourcing deal with an India-based supplier.
- Traditional Nordic banks are slimming down workforces as they turn increasingly to technology-based service delivery, and some are linking up with small fintech companies to deliver online products.
- With the latest version of the EU payment services directive coming into force, traditional Nordic banks can’t afford to slow their digital transformations.