Santander is set to offer cloud data storage services to corporate clients in a bid to fight back against competition from technology groups.
The Financial Times (FT) reports the move, which will make Santander the first global bank to offer cloud data storage services to corporates, highlights how banks are turning their investment in IT and regulatory scrutiny of their computer systems to their advantage in their fight against disruptors in the financial services sector.
“As I think how am I going to compete with all these new technology players, I can offer the services as some of these big guys,” Ana Botin, chairman of Santander told the FT.
Santander has invested £230m to build a vast new data centre in Leicester, comprising of two facilities with floor space bigger than four football pitches. As well as storing the bank’s own data, Botin intends to lease out the storage facility to clients to make extra money.
Santander, which has an IT budget of €3bn a year, is part of a number of banks investing heavily in IT and Botin’s comments come at a time when some companies are questioning the safety of their data with both tech groups and banks, following leaks from Edward Snowden about US goverment survellance and IT security breaches and cyber-attacks on banks, such as JPMorgan Chase last year.
According to the FT, Richard Lumb, head of financial services at Accenture said: “People will trust their banks with their data – much more than they do a technology company. I think there is something in this for banks, particularly if they turn it from plan storage to more of an added-value service.”
Barclays is already offering retail banking customers a cloud mobile banking service to store copies of their important documents, such as drivers licences and passports, however Santander plans to go much further by moving into the corporate data storage market and fighting head-to-head with the world’s big technology groups.
The FT reports that some rival bankers were sceptical about the bank’s move into corporate data storage and one senior executive questioned why they would want to move into the competitive area of data storage, when they currently have enough work to do.
Botin’s proposal highlights how seriously banks are taking the threat posed by disruptive new technologies, such as peer-to-peer lending, currencies and digital wallets. Lumb believes the scale and speed of disruption is a real threat and estimates that banks could lose a fifth of their consumer banking revenues to digital rivals.