UniCredit, IBM Signs $200 Million Agreement On Outsourcing

KIEV, Ukraine -- UniCredit SpA’s Ukrainian unit signed a $200 million agreement with International Business Machines Corp. to outsource information technology systems as the bank seeks to cut costs and improve customer service.

“This is the first instance of full outsourcing in the region and marks a new era” “in the development of Ukraine’s financial service sector,” Joseph Benaroya, vice president of IBM Global Technology Services, said of the 10-year agreement in a statement.

“Banks across growth markets are currently under enormous pressure to reduce costs and operational complexities while at the same time improve the customer experience.”

Armok, New York-based IBM wants to expand in the former Soviet republic. UniCredit’s unit is the country’s fifth-largest lender by assets as of Jan. 1, according to central bank data.

It has a network of nearly 400 branches and provides services to over 2 million customers across Ukraine.

“By outsourcing our informational technology activities to IBM we are able to focus on our core business priorities,” Francesco Pusateri, head of UniCredit’s Global Banking Services Division, said in the same statement.

It “will help us to strengthen our leadership in the Ukrainian banking sector.”

The cooperation with UniCredit’s Ukrainian unit will result also “in growing interest in the region in the same type of” services, said Alexander Bloch, the IBM’s head of financial services in Russia and CIS, by phone from Kiev.

It may bring other deals for IBM as “competitors don’t want to be left behind and they will have to look for potential outsourcing of their own IT.”

Source: Bloomberg