Santander Spain Turns to IBM for Cloud Modernization and ...

Santander Spain Turns to IBM for Cloud Modernization and Transformation

An IDC Customer Spotlight, sponsored by IBM

Marc DeCastroResearch Director, Consumer Banking, IDC

Steven D’AlfonsoResearch Director, Compliance, Fraud, and Risk Analytics Strategies, IDC

Jerry SilvaProgram Vice President, IDC

RESEARCH BY:

January 2021 | IDC Doc. #US47017820

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IDC Customer Spotlight, sponsored by IBM January 2021 | Doc. #US47017820

Cloud Provides Transformational Benefits and Value for Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Santander Spain Accelerates Cloud Strategy . . . . . . . . . . . . 4

Despite Hurdles, Improving Overall Customer Experience Must Drive Transformation . . . . . . . . . . . . . . . . . . . 5

The Case for Migrating to Public Cloud . . . . . . . . . . . . . . . . . . . 6

Santander Spain’s Most Important Criteria for Choosing IBM with Red Hat to Lead Cloud Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Leveraging Existing Relationships Is the Most Important Criteria Used to Select IBM . . . . . . . . . . . . . 8

Milestones for a Successful Cloud Conversion . . . . . . . . . . 9

About the Analysts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Message from the Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

Navigating this Customer Spotlight Click on titles or page numbers to navigate to each section.

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IDC Customer Spotlight, sponsored by IBM January 2021 | Doc. #US47017820 Table of Contents

Agility and Productivity Improved business agility was

reported by 32% of financial services executives .

Simplification and standardization of IT infrastructure and application platforms was realized by 31% of financial services executives .

Customer Experience The most-cited benefit from

cloud has been improving the customer experience: 38% of financial services executives said that they had seen an immediate positive impact on the overall customer experience .

Getting faster access to the newest functionality was realized by 31% of financial services executives .

Security Improvements in IT security

were realized by 31% of financial services executives .

Cloud Provides Transformational Benefits and Value for Financial Services

Source: WW Industry CloudPath 2020 Survey, IDC, May 2020

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Santander Spain Accelerates Cloud Strategy

“We must be able to leverage customer data in real time to create valuable customer experiences, for both customers and the bank, while ensuring trust remains the foundation of our relationship with our customers.” —Ignacio Alvarez, CIO, Santander Spain

Santander Spain is a leading retail and commercial bank headquartered in Spain with a presence in core markets in Europe, the U.K., and the Americas. Banco Santander has more than a trillion euros in total assets, 146 million customers, 11,800 branches, and 194,000 employees.

Project SnapshotOperational Challenge Santander Spain, with its own IT organization in charge of developing applications tailored to Spain, needed to accelerate its journey to cloud services .

Project Duration The project has been deployed with a phased approach . Phase 1 took three months and ended in July 2020 . Phase 2 is anticipated to be completed in mid-2021 .

Benefits The project accelerates the journey to hybrid cloud with a special focus on public cloud migration and operation, capitalizing on agility, efficiency, reliability, and innovation .

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Despite Hurdles, Improving Overall Customer Experience Must Drive Transformation

“As a bank we need to move where our clients live, i.e., to a real-time world of instant satisfaction. To ensure customer satisfaction, we must be able to harness their data in real time and transform their customer experience.” —Ignacio Alvarez, CIO, Santander Spain

External Forces for Transformation• Clients demand real-time transactions and instant

satisfaction .• Data management requires a focus on real-time

data streaming .• Banks are challenged by low-rate environments

and pressures on their balance sheets .

Barriers to Success• Legacy branch networks require proper strategies

of physical and digital .• Regulators and self-imposed policies limit the

adoption of new technologies like cloud, especially public cloud .

Customer Experience Matters:Only 47% of consumers recently surveyed felt it was easier to deal with their bank digitally rather than in person.Source: IDC Financial Insights Consumer Banking Channel Preference Survey, August 2020

BANK

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The Case for Migrating to Public CloudBanks must master real-time processing and decisioning to provide satisfactory customer experiences. To meet customer expectations, banks need the right technology that will play a central role in delivering experiences and maintaining customers’ trust.

“Everything that we’re developing needs to be able to work for both our internal cloud and our external cloud in a more transparent manner. IBM brought more to the table.” —Ignacio Alvarez, CIO, Santander Spain

Santander’s ApproachProject Go-Cloud, funded entirely by the IT group, was executed in a two-phase plan:

PHASE 1 PHASE 2

Establish the foundational elements of the project, including:• Automating services on Red Hat OpenShift

• Automating the software life-cycle tool chain

• Designing the internal learning academy

• Transforming and migrating a select few applications to the public cloud to establish a learning experience and collect data to help define the company’s migration plan for all applications

Execute the migration plan to transform and migrate the complete Santander Spain application portfolio to the right mix of private and public cloud .

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“IBM, in tandem with Red Hat, immediately had the expertise we needed to address our cloud challenge, and [they] have always been able to implement within our delivery requirements.” —Ignacio Alvarez, CIO, Santander Spain

Other Important Criteria• Knowledge and understanding of the

banking industry• Reliability and reputation of solution

proposed

Santander Spain’s Most Important Criteria for Choosing IBM with Red Hat to Lead Cloud StrategyTop Three Criteria

Most effective “out-of-the-box” fit for the challenge

Implementation schedule must align to bank’s strategic milestones

Vendor exhibits the expertise to address Santander’s specific challenges

1 2 3

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Source: IDC WW Industry CloudPath 2020 Survey, May 2020

Leveraging Existing Relationships Is the Most Important Criteria Used to Select IBM

Benefits of the Cloud JourneyThe top three greatest benefits seen by banks in their journey to cloud are:

Santander’s goal was to automate the software life-cycle production on a platform-as-a-service model, which was Red Hat OpenShift. While other vendors were considered, including the bank’s public cloud provider, IBM was a better fit because it brought more to the table around transformational projects.

Improved customer experience

Improved business agility

Simplified and standardized IT infrastructure and application platforms

“The reason we will continue to use IBM and Red Hat’s OpenShift is to leverage their expertise in application transformation and migration, as well as their solution knowledge.” —Ignacio Alvarez, CIO, Santander Spain

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“Our employees who participated in the project were motivated and they saw immediate results. We, as a bank, were willing to place our bets even though the ROI wasn’t so clear.” —Ignacio Alvarez, CIO, Santander Spain

Milestones for a Successful Cloud ConversionFor developers and development teams, the internal process for establishing a development environment can be frustrating. The procurement process to set up an environment can be difficult, and a time drain.

Focus on Tangible ResultsSantander wanted to ensure it was getting tangible results . One such element was the implementation of the self-provisioning portal . The portal allowed developers the ability to set up their own environments in minutes, without human intervention .

Translate scope into a set of “tangible” deliverables, such as real-time self-service with end-to-end automation.

Create tools that agile teams can use immediately.

Educate staff by helping them understand that the cloud journey is foundational.

Staff becomes further motivated by seeing their work implemented and used immediately.

PROJECT KEYS:

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Marc DeCastro is Research Director for IDC Financial Insights, responsible for the consumer banking engagement strategy practice . Marc’s core research coverage includes the complete omni-experience journey for the retail customer, including branch transformation, digital product strategies, and onboarding . Based on his background covering the consumer banking space, Marc’s research also includes a particular emphasis on how consumer trends and habits are forming the next generation of products and services that utilize current and emerging technology .

More about Marc DeCastro

Steven D’Alfonso is a Research Director with IDC Financial Insights, responsible for compliance, fraud, and risk analytics strategies . His coverage area includes research on technology solutions aimed at solving key issues facing financial institutions around GRC regulations, financial crime, and risk management .

More about Steven D’Alfonso

Jerry Silva is Vice President for IDC Financial Insights, responsible for the global retail banking practice . Jerry’s research focuses on technology trends and customer expectations and behaviors in retail banking worldwide . Jerry draws on over 35 years of experience in the financial services industry to cover a variety of topics, from the back office to customer channels to governance in the technology shops at financial institutions . His work for both institutions and vendors gives Jerry a broad perspective in technology strategies .

More about Jerry Silva

Marc DeCastro Research Director, Consumer Banking, IDC

Steven D’Alfonso Research Director, Compliance, Fraud, and Risk Analytics Strategies, IDC

Jerry Silva Program Vice President, IDC

About the Analysts

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Table of Contents

Message from the Sponsor

IDC Customer Spotlight, sponsored by IBM January 2021 | Doc. #US47017820

Banks are accelerating their transition to cloud computing to nimbly address the evolving demands of their customers in a secure and compliant environment. With offering capabilities that include AI, hybrid cloud and world class security, coupled with our deep financial services industry expertise and global delivery presence, IBM can help you digitize, modernize and surpass customer expectations. Together, we can help:

• Accelerate your journey to cloud and embrace a digital transformation in banking by modernizing core systems, applications, processes and ecosystems

• Deepen customer loyalty through exceptional customer experiences driven by the latest data and AI technology delivered on the cloud

• Optimize risk management, innovation, security and regulatory compliance: IBM Cloud for Financial Services is the world’s first financial services-ready public cloud to meet the tough cloud computing and regulatory requirements of banks and financial markets

Learn more at ibm.com/banking

https://www.ibm.com/industries/banking-financial-markets

Copyright 2021 IDC. Reproduction is forbidden unless authorized. All rights reserved.

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IDC. Doc. #US47017820

About IDC International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world’s leading technology media, research, and events company.

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