Italy’s competition watchdog stops Intesa moving clients to mobile bank

Nov 30, 2023

MILAN (Reuters) -Italy’s competition authority on Thursday said it had told the country’s biggest bank Intesa Sanpaolo to halt the proposed transfer of 2.4 million customers to its new mobile-only service Isybank.

The decision is the latest blow to Intesa’s efforts to update its digital infrastructure and gradually abandon legacy IT systems in favour of cloud technology.

Italy’s AGCM antitrust authority opened a probe earlier this month into the way Intesa was transferring clients to Isybank after a raft of complaints which the watchdog said had now reached 5,000.

It wants Intesa to only move clients who explicitly give their consent.

“In this way account holders will be put in the condition of choosing whether to keep their account with Intesa Sanpaolo … or shift to Isybank,” AGCM said in a statement.

Customers have complained that they failed to notice a message from Intesa about the migration in time to opt out of Isybank because it had come into their current accounts’ digital inbox during the August holidays.

“We believe we complied with existing regulations and we did receive authorisation by the Bank of Italy and the European Central Bank for the various moves,” Intesa Chief Executive Carlo Messina told reporters at an event on Thursday.

“Our goal is to develop a new technology and allow Italy to benefit from innovation … if we have to improve the way we communicate, we’ll do that,” he added.

Intesa customers also complain about not having computer access, but only via their mobile phones, and to have lost the option to create one-off credit card numbers to shop online more safely.

Isybank CEO Antonio Valitutti said in a recent newspaper interview such “virtual” payment cards would become available soon for Isybank users, who will also be given computer access.

Isybank targets 4 million Intesa customers under 65 who only access their banking services remotely. It also wants to add 1 million new customers by the end of 2025.

The group migrated the first 300,000 Intesa account holders in October and plans to shift another 2 million in March.

Isybank, a cloud-based, low-cost mobile bank, is a key plank of Messina’s long-term strategy to withstand competition from fintech and focus Intesa on more profitable businesses such as wealth management and insurance.

Shifting bank services onto a cloud platform is a major challenge for mainstream banks, when IT infrastructure is often outdated and can be made unwieldy by the overlapping of different systems resulting from bank mergers.

(Reporting by Valentina Za and Giulia Segreti; Editing by Christina Fincher, Jane Merriman and Susan Fenton)

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