By Vaibhav Sadhamta
MILAN (Reuters) – Intesa Sanpaolo, Italy’s biggest bank, on Thursday launched a new digital lender dubbed Isybank as it strives to upgrade the technology underpinning its business and cut costs.
Isybank is powered by cloud technology provided by Britain’s ThoughtMachine, a cloud-native banking technology firm. The cloud services are supplied by Google which has invested 1 billion euros ($1.1 billion) in Italy to set up the two cloud regions Intesa will rely upon.
High-street banks globally face a big challenge in replacing their existing core IT infrastructure, known as mainframe, with cloud technology. Legacy systems pose a major hurdle, while the task is easy for challenger banks built from scratch on cloud technology.
ThoughtMachine CEO Paul Taylor told a presentation that established banks like Intesa could still aim to combine a top-notch digital experience with the financial resilience, wide user base and product offering of traditional lenders.
Intesa has said it will attempt to shift its entire business onto the cloud if Isybank proves successful.
With an ageing population, Italy is a digital laggard in Europe.
Intesa Sanpaolo has forecast its new digital bank would save around 800 million euros a year in 2026-2027, up from 600 million euros in 2025, according to a strategy presentation delivered in February last year.
“What we’ve managed to accomplish in just 12 months is something the entire country should be proud of,” CEO Carlo Messina said.
Isybank targets some 4 million Intesa customers who generate around 200 million euros in revenues a year and could become more profitable for the bank if shifted away from branches given they already only use digital bank services.
Stefano Barrese, the head of Intesa’s commercial banking business, said that out of the bank’ 12 million customers 8-9 million used also digital channels, and roughly half of those only digital means. That share was 400,000 back in 2013.
($1 = 0.9158 euros)
(Reporting by Valentina Za; Editing by Conor Humphries)
