US Citizens Bank moves to IBM managed service as it splits from UK bank

US bank outsources IT as it moves on from split with RBS

Former Royal Bank of Scotland-owned Citizens Bank has agreed a five-year IT services contract with IBM that will see its back-end systems move to a managed service.

The US-based bank was a subsidiary of The Royal Bank of Scotland (RBS) until March 2015. The company wants to transform its IT to enable it to meet customer demand for digital services.

IBM will optimise the bank’s existing IT infrastructure by integrating automation and predictive analytics technologies to standardise and streamline internal IT systems and processes. This includes core banking applications, branch operations and online and mobile banking.

“Information technology plays a key role in our ability to anticipate and meet the needs of every customer, across every channel,” said Ken Starkey, chief technology officer, infrastructure services, at Citizens Bank.

By outsourcing its IT, the bank can harness skills it does not have in-house to enable it to quickly transform. “This agreement with IBM will provide immediate access to new technologies and capabilities, enabling us to create greater efficiencies in support of Citizens’ growth objectives,” added Starkey.

IBM will operate existing and future IT systems in the bank’s datacentres in Rhode Island and North Carolina. IBM also will support Citizens Bank’s voice and data networks and provide IT support to all staff. 

The outsourcing agreement is the first stage of a multi-stage transformation of the bank’s IT environment. Many businesses are transforming their IT infrastructures as they move to digital technologies for staff and customers. 

Analyst Forrester recently said that as companies move to digital ways of working, infrastructure outsourcing is critical. “The market for infrastructure outsourcing services remains critically important as enterprises prepare their infrastructure for the new digital age,” it said.

Last year, IBM won a seven-year, $1.25bn contract with WPP to put digital services on a hybrid cloud and manage it globally, ABN Amro extended its multibillion-euro outsourcing deal with IBM by a further 10 years and German airline Lufthansa confirmed a €1.25bn, seven-year outsourcing contract with IBM to reduce its IT costs by €70m a year.

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