UniCredit, Italy’s prominent bank, has unveiled enhancements to its mobile banking service, Buddybank, aimed at facilitating the transition towards a cloud-based core banking infrastructure. Traditional banks are faced with the challenge of migrating their IT operations to the cloud, departing from the increasingly outdated mainframe system. The complexity of mainframe programming languages makes it challenging to recruit young professionals capable of effectively working with this technology.
The Buddybank Evolution:
Buddybank, a mobile banking service initially launched by UniCredit in 2018, has been serving around 410,000 customers, predominantly individuals who were newly acquired clients rather than existing UniCredit account holders. In this development, UniCredit extends the offering by providing all its clients with the option to switch to Buddy R-Evolution, the reinvigorated mobile application. Through Buddy R-Evolution, UniCredit will offer its full range of services and products, including lending and additional features such as real estate advice. Buddy users will have access to assistance from support staff and guidance from dedicated bankers.
Unified Backend Infrastructure:
UniCredit has successfully unified the backend infrastructure supporting both traditional commercial banking operations and Buddybank. UniCredit’s CEO, Andrea Orcel, emphasized the significance of this integration, stating, “Up until now, there were two separate banks, but this is no longer the case.”
Transition to Cloud Computing:
Orcel’s announcement is in line with UniCredit’s strategic shift toward a cloud-based IT framework. During a press conference following the release of UniCredit’s third-quarter results, Orcel informed analysts of the bank’s intent to “accelerate Phase 2 of our digital transformation, transitioning decisively from on-premises IT software to a unified and efficient cloud-based platform for hosting all data and applications.”
Mixed Financial Outlook:
While UniCredit exceeded its quarterly forecasts and adjusted its revenue projections for the year upwards, it refrained from revising its 2023 profit and shareholder distribution guidance. The bank cited the need for additional time to determine the optimal allocation of its significant profits.
Seamless Transition to Buddy R-Evolution:
UniCredit customers can transition to Buddy R-Evolution with ease. They need only download the application, allowing them to access their current account without making any alterations to their existing bank details. This streamlined process prioritizes customer convenience while embracing innovative digital banking solutions.
Comparable Transition Challenges:
The transformation towards cloud-based mobile banking is not unique to UniCredit. Rival bank Intesa Sanpaolo, for example, has faced its own challenges while transitioning younger, tech-savvy clients to its cloud-based mobile bank, Isybank. A notable disruption was caused by changes in bank details for customers in this transition.
UniCredit’s strategic enhancement of Buddybank and its commitment to the cloud-based core banking infrastructure underscore the banking industry’s evolution towards embracing cutting-edge technology. By providing its clientele with Buddy R-Evolution, UniCredit aligns its services with the digital age, prioritizing customer accessibility and convenience. While UniCredit successfully navigates its transformation, it is also indicative of the broader industry shift towards cloud-based banking solutions, aimed at enhancing efficiency and customer satisfaction. As these Italian banking giants make these crucial transitions, their experiences offer valuable insights into the evolving financial landscape and the challenges it poses.
