Samsung SDS wins mega KDB deal

04-Jul-2020 Intellasia | KoreaTimes | 8:41 AM Print This Post

Samsung SDS was chosen as the preferred negotiator for Korea Development Bank’s (KDB) IT system management project, a deal valued at an estimated 287 billion won ($239 million).

If their upcoming negotiations progress smoothly, the decision by the state lender will allow the Samsung affiliate to handle the entire maintenance of the bank’s banking information systems over five years starting from February 2021. According to KDB, a specific timeline for the upcoming negotiations with Samsung SDS has not been fixed.

The lender placed a tender notice, as its current contract with SK C&C expires on January 31 next year. The IT service affiliate of SK Group was desperate to extend the contract, but the Samsung affiliate got one step closer to replace it. The company had been a longtime IT client for KDB and was in charge of the lender’s IT system management for 15 years since 1999.

KDB did not comment on details over the deal. The lender said the latest decision came after it evaluated the two firms’ technological expertise and pricing proposal on Wednesday and Thursday. Under the deal, KDB plans to spend more than 50 billion won each year on maintenance of its IT systems.

The project was cited as one of the mega IT deals offered by state-run financial players here. The deal is centered on maintenance of the lender’s overall banking systems ― such as internet and mobile banking, call centers and corporate capital management.

The necessity is increasing for expanded partnerships between financial players and IT service providers, as the banking industry is in the process of seeking a paradigm shift with the rise of contactless transactions sparked by the COVID-19 pandemic.

With the local financial industry rushing to embrace non-face-to-face transactions and build relevant platforms, local lenders are expected to place more emphasis on expanding their ties with IT players in the future.

Samsung SDS expects the deal will let it expand its foothold in the public IT sector, which the company believes is lucrative but untouched. It stopped engaging in financial and public projects in 2013, but reversed that decision in 2018, and is moving to re-accelerate its drive for the areas in line with the IT-converged banking paradigm shift.

At that time, the company unveiled its “Nexfinance” digital finance platform powered by artificial intelligence (AI) and blockchain technologies.

“By successfully clinching the deal, we are going to advance KDB’s IT platforms by injecting our state-of-the-art digital technologies,” an official from the company said. “We are going to develop KDB’s banking platforms by using our key digital finance technologies ― such as AI-powered chatbots and robot process automation.”

SK C&C is widely seen as a rising power in the IT system industry by recently winning multiple deals from commercial banks ― such as KB Kookmin Bank and Woori Bank.

On the other hand, Samsung SDS boasts a relatively long history in managing IT services. The company made headlines in March by signing a data centre relocation contract with ABL Life Insurance. Under the deal, the company will provide consulting services for the insurer’s cloud-based digital transformation for the next five years.

In November 2019, a consortium led by Samsung SDS signed a contract with the Ministry of Economy and Finance over establishing a next-generation account management system. The deal was worth 120 billion won.


Category: Korea

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