Intesa Sanpaolo is Europe’s leading banking group, which is deeply involved in digital transformation:
Italy-based Intesa Sanpaolo is a leading banking group in Europe with more than 5000 branches across the world and 19 million customers. As of May 2022 the Group had a market cap of $39.74 billion, which makes it the world’s 419th most valuable company by market cap. It was formed through the merger of Banca Intesa and Sanpaolo IMI in 2007, but the bank has a corporate identity since the founding of Istituto Bancario San Paolo di Torino in 1583.
The bank first embarked on a digital transformation in 2018, which it called ‘Digital Architecture Reengineering Works Through Innovation’. The process involved creation of a microservices-and container-based architecture, in place of multi-tier applications it has been using hitherto. The process intended to speed up development cycles, cut down application footprints for more flexibility, and improve scalability and reliability. At the core of the process was the transformation of the IT group in the bank into a software company with a bimodal IT model based on modern CI/CD, or continuous integration, continuous delivery, and continuous deployment practices. The bank has developed a system of running containers managed by Kubernetes.
Now, the bank runs thousands of applications in a metro-cluster environment along with data replication at distant sites. Several of these applications are running in production in the new microservices architecture, including 2 of the 10 most business-critical for the bank in a multi-cluster and multi-site model with data replication providing high availability.
Most importantly, what the bank did was to move software development from a scenario, where all actors insisted on a single pipeline, and where a single commit could fail a build and stall the development, to one where each actor had his or her own stream of development for each dedicated component. This methodology helped in scaling the needs of the application team for their specific infrastructure.
NEW DIGITAL BANK
The bank has created a 2022-25 Business Plan mainly to cut structural costs through significant investment in technology and growth. A crucial part of this business plan is the setting up of a state-of-the-art, cloud-native digital bank that is also seen as the main part of the Group’s future-facing digitization plans. The digital bank, called isybank, is 50% owned by Intesa Sanpaolo Group, and the other 50% by Mooney, a joint venture between ISP and the Italian Enel X, part of Enel Group. The bank has been created in partnership with Thought Machine, the U.K.-based fintech that has developed a modern core banking platform in the cloud. Called the Vault Core platform, it gives banks full control to do, and build, anything they want. Banks can run any product they wish.
Intesa Sanpaolo believes that the new digital bank can serve customers outside of branches, will reduce costs and cater to the approximately 4 million customers who are already utilizing digital-first services. The strategic partnership with Thought Machine will also see the bank develop a single digital core banking front-end system for the international market, in line with the new domestic digital bank offering.
The Group has made a £40 million investment in Thought Machine to become part of the company’s growth story.
The core feature of isybank’s digital platform is that it is cloud-native and serves the customer with an app, a contact center, Mooney partner shops and the Group’s ATM network. The strategy is based on entirely digital sale paths and the use of ‘AI Sales’, but its customers can have ‘selected access’ to branches and agents if they need more information about a product or service.
Intesa Sanpaolo Group has also announced a digital platform ‘Incent Now’, which is intended at implementing plans to support Italian companies and entities interested in the National Recovery and Resilience Plan (NRRP). The bank, through the period of its Business Plan, will support the real economy with a program dedicated to the NRRP initiatives, making available over 400 billion euros of new medium-/long-term financing, of which 270 billion euros for businesses.
Incent Now, launched in partnership with Deloitte, is being made available free of charge to all customers.
DIGITED LEARNING PLATFORM
The bank has also announced recently that it has reached an agreement with Nextalia SGR, on behalf of the Nextalia Private Equity Fund, to create DIGIT’ED, a digital learning company. DIGIT’ED will be engaged in education, training and digital learning, targeting large companies, small and medium enterprises, the public administration and professional associations and the consumer segment.
The group has set up Artificial Intelligence Lab, within which there is an Innovation Center. The Lab uses AI to create new assets and skills that augment businesses to remain competitive. The Lab has developed practical applications and done theoretical research. The lab has patented a unique technology designed to protect financial portfolios from significant adverse market movements. It is based on AI and can now analyze a much broader set of risk factors than before and the analyses can be done in just few seconds.