Intesa Sanpaolo Targets Digital Growth After UniCredit Merger Blocked

Intesa Sanpaolo, Italy's largest bank, is focusing on attracting new digital-only clients through its Isybank arm after antitrust regulators blocked its planned merger with rival UniCredit. The bank has already acquired around 90,000 new customers through Isybank and aims to add one million new digital clients by the end of 2024.

Why this matters: The shift towards digital banking has significant implications for the entire banking industry, as consumers increasingly turn to online services. As Intesa Sanpaolo navigates this transition, its success will set a precedent for other banks to follow, potentially reshaping the Italian banking landscape.

The shift in strategy comes after Italy's competition authority ruled in November that Intesa Sanpaolo needed to obtain explicit consent from around 4 million clients it planned to migrate to Isybank based on their digital habits. The decision effectively halted the bank's original timetable, which targeted moving 2.3 million existing clients to the digital platform by March.

Despite the setback, Intesa Sanpaolo's Chief Technology Officer, Massimo Proverbio, stated that the digital transition to a cloud-based IT infrastructure is progressing well. The bank has partnered with London-based Thought Machine for Isybank's core banking technology and with Alphabet and Telecom Italia for cloud services. Proverbio noted, "Things have gone very well: the infrastructure has proven reliable, we've successfully tested it with as many as 20 million accounts."

Intesa Sanpaolo's IT investments, which topped €3 billion in the first quarter, are expected to boost gross results by €150 million next year. The bank plans to migrate its full group IT infrastructure to the cloud by the end of 2026. European banking supervisors have urged banks to prioritize technology to maintain profitability as consumers increasingly turn to digital services.

The blocked merger with UniCredit and the antitrust ruling have forced Intesa Sanpaolo to adjust its digital strategy. However, the bank remains committed to its technological transformation, with CEO Carlo Messina emphasizing the focus on long-term growth rather than short-term measures likesharebuybacks. As Intesa Sanpaolo navigates the evolving banking landscape, its success in attracting new digital customers will be crucial to maintaining its position as Italy's leading bank.

Key Takeaways

• Intesa Sanpaolo targets 1 million new digital clients by 2024 through Isybank arm.
• Antitrust regulators blocked Intesa's merger with UniCredit, forcing a digital strategy shift.
• Intesa invested €3 billion in IT in Q1, expected to boost gross results by €150 million in 2024.
• The bank aims to migrate its full IT infrastructure to the cloud by 2026.
• Intesa's digital success will set a precedent for other Italian banks and reshape the industry.