SEB Partners Google Cloud for New Product Development

By Ahmed Rahma

A Swedish financial group, SEB AB, has partnered with Alphabet’s Google Cloud to save costly future investments in technology upgrades.

SEB is the latest European lender to link up with cloud service providers to help speed up new product development and analyse the vast troves of data that banking generates.

Deutsche Bank AG and HSBC Holdings Plc signed deals with Google and Amazon Web Services last year, and the industry earlier this year formed a user coalition, Bloomberg revealed.

Speaking on the agreement in an interview, the chief information officer of the bank, Nicolas Moch, said the agreement will enable the bank to ratchet up cloud computing so that more than half of its technology will be in a cloud environment within five years.

The Stockholm-based bank information officer also stated that the agreement will help SEB improve advisory services for retail customers and investment banking services.

According to him, using Google scalability would make it easier for the bank to expand into other countries if they decide to.

For SEB, the deal with Google doesn’t mean cost cuts, Moch said. Instead, the bank will do “cost-avoidance, where we will work with Google Cloud rather than building things ourselves.”

Moch disclosed that the first products from the collaboration are likely to be launched in 2022 and then increase “during the next decade.”

On the part of the managing director for Google Cloud’s Nordic operations, Eva Fors, she said it’s “by far the broadest and deepest financial services partnership” in Scandinavia, and will entail Google training SEB employees.

However, the duo declined to provide the terms of the agreement.

In recent times, such partnerships are becoming more common as the pandemic accelerates a shift to the web- and app-based services, challenging traditional banking models.

Klarna Bank AB, a Swedish payments firm, is an example of a startup that became a global player, thanks to its use of technologies that others in the finance industry were slower to adopt.

The agreement allows SEB to avoid the kind of costly investments that bigger rivals like Nordea Bank AB have had to make.

The largest Nordic bank has spent heavily in recent years to replace its stitched-together core banking systems into a single, streamlined platform.