The central bank said technology spending by Italy’s biggest banks lagged behind its European peers and recommended financial institutions increase spending to encourage innovation in the financial services they offer.
Italian banks have quadrupled their investments in the latest technology since 2017, but the amounts are still fairly small.
Italian lender Intesa Sanpaolo plans to move to a cloud-based core banking IT system that it has effectively tested with its new digital bank, with the goal of investing 5 billion euros ($5.4 billion) in technology between 2022 and 2025, Reuters reported.
UniCredit, Italy’s second-largest bank, outsourced its IT infrastructure a decade ago and plans to spend 2.8 billion euros on technology between 2022 and 2024.
Spain’s largest bank, Santander, has announced plans to invest more than 20 billion euros in digital and technology projects in 2019.
Nevertheless, the Bank of Italy is stepping up its scrutiny of IT outsourcing contracts.
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According to the Bank of Italy, technology is playing a key role in cutting costs and lowering customer service fees, with online accounts typically costing 60% less than traditional accounts.
To improve their reputation and strengthen their customer base, banks also need to leverage technology to provide better quality services and products.
Additionally, Italy was set to launch an investment fund in mid-March with an initial investment of 1 billion euros ($1.09 billion) to support artificial intelligence (AI) efforts.
Italy wants to use its G7 presidency this year to highlight the impact of AI on inequality and employment, as well as set guidelines for future technological progress.
Rome will set up an agency to oversee and support the implementation of the country’s AI policy as part of legislation due to be introduced.
