VTB IT Strategy

The main articles are:

• Information technology in VTB Group
• VTB IT Budget

2024: VTB spoke about the services planned as part of the new development strategy

On February 26, 2024, VTB presented a strategy for the development of the group until 2026. According to the deputy chairman of the board of the bank Dmitry Pyanov, the basis of the document was the idea of ​ ​ using all formats of interaction with clients in order to make such financial expertise available to all client segments

It's not just a document. For us, these are obligations to customers, shareholders, partners, which are assumed by the entire bank team - from ordinary managers to managers, - he said.

Unsplash

According to the press service of VTB, the strategy for 2024-2026. - "This is a new stage in the digital transformation of the bank." The credit institution intends to restructure the work with corporate clients, shifting the focus from standard products to individual requests and needs of organizations. In particular, for active clients who regularly receive a salary or transfer it to accounts with VTB, it is planned to cancel the commission for services in self-service devices and for all transfers by phone number through the Fast Payment System (FPS) in the amount of up to 1 million rubles per month.

As part of the new strategy, VTB will also focus on comprehensive customer and family service. For them, the bank will launch its payment solution VTB Pay, expand payment under the SBP, update the loyalty program for retail clients, etc. It is planned to expand the VTB ID service, which allows customers to enter marketplaces and other online resources and use them when buying in installments.

To develop remote service, VTB plans to expand the number of its couriers-field managers and the geography of their work to 3.5 thousand settlements by 1.5 times in 2024. According to the bank's forecasts, by 2026 their services will be able to use the 92% of Russians in 23 thousand cities and towns. Customers will be able to issue credit and savings products, as well as configure digital services.^[1]

2023

AI, CFA and the digital ruble. VTB Development Strategy to 2026 Approved

On December 19, 2023, the VTB Supervisory Board approved the bank's development strategy for 2024-2026. Several digital projects were included among the strategic areas.

According to the VTB press service, the development strategy of the credit institution includes tasks to ensure technological sovereignty and the introduction of advanced financial products using new opportunities for artificial intelligence (AI), as well as services based on the digital ruble and digital financial assets (CFA).

VTB approved the bank's development strategy for 2024-2026

We understand well what VTB 2024 - 2026 should be: a reliable financial support for the Russian economy and business, a bank of 35 million retail clients, a modern technological platform based on domestic decisions, - said the President - Chairman of the Board of VTB Andrei Kostin, whose words are quoted by the bank's press service.

Earlier in 2023, VTB said that the bank invested 291.3 billion rubles in the digital transformation program. It is important that radical changes were carried out both in the IT infrastructure and in business processes, stressed Vadim Kulik, Deputy President-Chairman of the VTB Board.

The key areas of development for 2024-2026. also included financial support for structural transformations and a new investment cycle in the economy, the scaling of retail business while providing leading positions in the quality of financial services, as well as a multiple increase in settlements in national currencies with friendly countries.

Monitoring the implementation of the strategy will be supervised by a new member of the VTB Management Board: he was elected Vladimir Levykin, who holds the position of Head of Strategy and Corporate Development. The personnel decision will come into force after approval by the Bank of Russia, VTB said.^[2]

Results of the first stage of the bank's digital transformation

On June 7, 2023, the bank VTB announced the results of the first stage of digital transformation. bank The Deputy President-Chairman of the Board Vadim Kulik spoke about the creation of a technologically different bank that meets industry standards. Unification of information systems was carried out, the product backlog was eliminated, the level of reliability was optimized, and an updated production process was created.

As reported, according to the results of the first phase of VTB's digital transformation, 11.5 million retail clients of the bank make more than 50 million payments and transfers to VTB Online every month. More than 1 million small businesses use the SMB Internet bank. Over 750 thousand users conduct about 7 million digital operations per month. 19 thousand large business clients use the banking solution RBS 2.0, performing more than 1 million operations per month. The VTB Pro system helps 12 thousand employees of the VTB retail network at 1270 points of sale to solve the problems of 410 thousand customers per week.

Everything that VTB does happens on modern technologies. We almost completely moved the bank to updated systems, eliminated the product backlog, optimized the availability of key systems to 99.99% with a multiple increase in changes, and also created an updated production process. We met the target for the end of 2022, ensuring the speed of product withdrawal in 30 days. By the end of 2023, we plan to make this figure up to 21 days - from the moment the goal is set to the moment of putting into commercial operation. Import substitution also plays a crucial role in digital transformation. And we set the goal of ensuring technological sovereignty a few years ago, because we consider it economically sound. The economic effect for the bank from the transition to independent import solutions will be at least 30 billion rubles over three years. told Vadim Kulik

VTB continues to work on the migration of the bank's information systems from outdated data centers (data centers) to the target configuration of data centers. As part of the migration program, the fifth data center with outdated equipment has already been replaced. The plans are to replace two more non-target data centers by the end of 2023 in order to completely update the infrastructure.

VTB has created a fully omnichannel platform on a microservice cloud-native architecture. 167 technological solutions have already been built on the platform, which close all products, services and services of the bank in all channels and for all types of customers. The platform is included in the Unified Register of Russian Software, which allows the bank to make it available to other participants in the Russian technology market.

As part of the import substitution program, the share of application systems independent of imported technologies exceeded 60%. As of June 2023, the retail segment already uses 95% of domestic technologies. VTB brought the share of expenses for domestic software to 75% in the total amount of expenses for software.

The Bank develops and develops products and technologies both together with universities, such as MIPT and Skoltech, and together with technological partners. Among the solutions that are already used in the bank and are available to other market participants through VTB's technological partners are, for example, the Mirion graph analytics platform. It can be used to counter fraud, verify counterparties, automate the process of identifying conflicts of interest and manage critical infrastructure. The solution helps to optimize the time to analyze such information both by person and by external information systems.

Together with MIPT, VTB has developed an Industrial Optimizer, the purpose of which is to help Russian companies optimize their processes. The service can be useful to a variety of industries, from the financial market to the aircraft industry. Also, together with MIPT, another promising technology in the field of data management is being developed - Crypto-enclave. For June 2023, the experimental sample is being tested inside the bank, after which it is planned to enter the industrial testing phase.

At the end of May 2023, VTB presented the market with a system of working with innovations. It includes the VTB Accelerator, its own Technological Laboratory for searching, researching and testing large-scale technical solutions from the open market, as well as the Venture Studio. Thus, the bank has formed a system of complementary tools for quick and efficient work with innovations.

VTB's further technology strategy is aimed at outperforming market trends. By December 31, 2024, only domestic software included in the Unified Register of Russian Programs should remain in the bank's critical IT infrastructure. To come to such a result, several parallel processes were launched in the bank - obsolete systems from the point of view of architecture are being decommissioned, and those already implemented in the import-independent logic are being introduced, some of the previous systems are being transferred to other components.

The bank also sets itself the task of creating business solutions and optimizing existing business platforms on an updated technological foundation. It is also necessary to implement programs aimed at joining the financial members of the group, to make a transition from the reliability of individual systems to the continuity of business services.

2020

Senior Vice President of VTB Sergey Bezbogov - on the strategy, budget and new leaders of the IT block

Over the past 9 months, VTB has seriously updated its IT management structure and hired a number of new experienced managers, including those from Sberbank and Alfa-Bank. Senior Vice President, Head of the IT Organization and Management Department Sergey Bezbogov, who is one of the managers of the "new wave," in an interview with TAdviser spoke about how the IT unit works after these transformations, about VTB's IT strategy and budget. Read more here.

12 key VTB digitalization programs announced until 2022

On July 22, 2020, at a meeting of the advisory board of shareholders VTB with the participation of the Deputy President-Chairman of the Board Vadim Kulika , members of the board of shareholders were presented with key initiatives and directions in the field of technological development and digitalization. They are an integral part of VTB Group's development strategy until 2022.

In particular, shareholders were presented with 12 technology programs in key areas of transformation. VTB provided TAdviser with a list of these programs, as well as the goals that the bank plans to achieve through their implementation.

All technological programs, despite the pandemic, are implemented without any deviations in terms of timing and budget. The transition of operating functions to a 100% remote work format, which VTB carried out first and in the shortest possible time, did not affect VTB's plans to build an advanced operational and technological platform within the framework of the current strategy, - said Vadim Kulik at the meeting.

Special attention was paid to the modernization of the bank's systems. According to VTB, since the beginning of 2020, the bank has accelerated the delivery of SMS and push messages to customers 30 times, doubled the performance of VTB-online and 10 times the remote banking system.

The members of the shareholder advisory board expressed their readiness to act as testers of new products and IT solutions of VTB to form a better client offer to users of the bank's services.

2017: Contract with McKinsey for strategy development for 293 million rubles

At the end of April 2017, VTB Bank signed a contract with the Russian division of McKinsey & Company for consulting services to develop a detailed IT strategy for 2017-2019 and its implementation program. These services will cost the financial institution 293 million rubles.

The Bank selected the consultant through an open request for proposals^[3]. McKinsey & Company was the sole bidder for the contract.

One of the requirements for the contractor was that the key members of his project team have practical experience in five projects to develop an IT strategy and its implementation program over the past five years.

VTB will invest 293 million rubles in the development of a new IT strategy

The contractor shall provide services in two stages. The first is the development of a strategy and the determination of the target organizational structure of IT. Here you need to check the bank's readiness for digital transformation, prepare an IT strategy for 2017-2019 and determine the target IT organizational structure.

At the same stage, VTB asks to ensure the promotion of the flexible development methodology (Agile) as one of the key initiatives of the strategy. The Contractor shall identify key roles in the flexible development teams, establish qualification requirements for the key competencies of the flexible development and submit the requirements to the HR department.

In addition, it is necessary to organize and hold meetings with business units and support and control units to discuss the benefits and opportunities of implementing IT projects according to the Agile methodology.

The second phase of work entitled "Support the implementation of the IT strategy and the implementation of a target organizational structure for subsequent digital transformation" provides for several main points. In particular, this is the definition of an approach to managing IT efficiency, the development of a targeted IT budget management process, support for external and internal communications, prioritization of strategic IT projects, etc.

2016: IT strategy as part of the business

In September 2016, Olga Dergunova, Deputy President and Chairman of the VTB Management Board, told^[4]the IT strategy will become an integral part of the new VTB Group development strategy for 2017-2019.

It will be based on IT solutions that will be a tool for business development and new business opportunities. When forming the main directions of development of VTB Bank IT, we will rely primarily on the interests of our clients, including shareholders, - said Dergunova.

VTB Group's business strategy for 2017-2019 was approved in December 2016. It mentioned that the technological transformation of the group provides for the advanced development of digital channels, a significant reduction in the timing of the launch of modern products and services for customers, the development of data analysis tools and a comprehensive program for optimizing and automating processes.

2013: Accenture develops IT strategy for RUB 70m

Consulting services on the development of the previous IT strategy, VTB designed for the period 2014-2016, were provided by the company. At the Accenture end of 2013, she won^[5] in the group's tender, ahead of another consulting company - (PricewaterhouseCoopers Russiа PwC Russia).

The cost of the contract for services was then about four times lower than in 2017 - it amounted to 70 million rubles.

2011: McKinsey's New IT Strategy

VTB Group's new IT strategy was developed from April 2009 to November 2010, VTB Bank reported. The consultant for its creation was McKinsey, with which VTB has been cooperating for 5 years, and with the assistance of which the previous IT strategy was developed (for 2007-2010). Ernst & Young became the auditor.

The strategy of the coming years will be devoted to VTB reaching a new target level: this is a strategy for achieving high-tech business support, "said Dmitry Nazipov. - We must be competitive not only in Russia, but also in the world, and our IT strategy should contribute to this. So the tasks of providing service at the level of the world's leading banks are our benchmark.

According to a McKinsey study, VTB is included in the segment of banks with high efficiency in general and low IT costs. Nazipov noted that in 2009 VTB IT costs accounted for 4% of the bank's total budget, with the "average European" and "average Russian" IT costs of banks about 7%.

VTB IT strategic goals are determined by business priorities, Nazipov says. These are supporting new products and service channels, improving the efficiency of business processes, providing high-quality data and tools for making management decisions and fulfilling regulatory requirements, ensuring business continuity through a reliable IT infrastructure, and providing business units with timely IT services.

Centralizing the delivery of key infrastructure services to the group's companies was expected to reduce IT infrastructure costs, improve hardware utilization through increased utilization, best practices (e.g. virtualization), and business continuity. One of the results was to use the SLA-based service model, which was planned to be extended to all subsidiaries in Russia.

One of the optimization measures to reduce IT costs was the reduction of IT employees: their number decreased by 200 people - due to those working in regional branches of VTB. Further optimization of the IT staff should have taken place as VTB merged with Transcreditbank and VTB North-West.

Obviously, after the integration of the IT infrastructures of these banks and VTB, there will be no need for teams of IT specialists to duplicate each other's functions with the support of the infrastructure, Nazipov said.

A number of released employees were planned to be redirected to the implementation of current VTB IT projects. The bank did not rule out the possibility that external IT structures (similar to those of VTB in St. Petersburg) will be formed from some of the IT specialists.

In addition, VTB planned to continue active cooperation with large Russian IT companies. The goal of all these transformations, according to Nazipov, is to achieve an optimal ratio between internal and external IT projects in terms of efficiency and achieve a 30% increase in the efficiency of IT departments.

Among VTB's specific plans for the future, Dmitry Nazipov named the upcoming replacement of the CRM system. He noted that at that time CRM Sales Logix worked in the bank, which quite correctly coped with its tasks. But the introduction of a new CRM (a specific solution at that time had not yet been chosen) was seen as a strategic investment that would allow VTB to effectively manage customer relations over the next 10 years.

In the course of the IT strategy 2010-2013, it was planned to carry out a number of significant IT projects in all VTB Group entities: VTB 24, VTB North-West, VTB Capital, as well as VTB Bank branches in the CIS and far abroad.

In the 4th quarter of 2011, VTB decided to extend a successful project to automate the business processes of conducting documentary and warranty operations in the parent organization and branches of the bank to subsidiary banks of the group. The second stage of the IT support project was implemented to provide corporate clients of the bank with banking products of the Cash management segment.

In addition, the bank completed a project to develop a disaster-proof IT infrastructure, created a data center and developed the concept of building a fully functional backup data center. Its construction should begin in 2012.

2007-2010: Results of the implementation of VTB Bank's IT strategy

Summing up the implementation of the 2007-2010 IT strategy, Senior Vice President, Head of Department information technology VTB Dmitry Nazipov noted:

Over the past four years, the coverage of IT functional areas of the business has significantly changed - more than 80% of the main functionality has been automated. Thus, the foundation was created for the transition in the next 3-4 years to another target level.

Automated Banking System

The priorities of VTB Bank over the past three years have been five large IT projects. One of the most famous is the creation of a centralized ABS. In 2008, VTB introduced three prototypes of Western ABS, but it turned out that among them there were no systems that the bank could implement and customize in a short time.

As a result, the decision of the domestic company "New Athens" was chosen. This choice made it possible to transfer 55 branches of the bank to a single ABS within a year and a half (per week - by branch).

Many have heard the expression: Russia is a cemetery of foreign ABS, - noted Dmitry Nazipov. - About 50 projects on introduction of western ABS were launched in Russia, of which 1-2 successfully ended. Because there is no chance of implementing these solutions in a reasonable time and for reasonable money.

According to Nazipov, VTB's reasonable conservative approach once again proved its right to exist: a project to introduce Western centralized ABS would cost 4-6 times more.

All branches of the bank were transferred to the centralized ABS "New Athens." The bank has unified and optimized business processes, increased labor productivity of operating employees and reduced operational risks.

Centralization of the back office

In addition to centralizing ABS, the bank centralized the back office of the Moscow region, which made it possible to increase operational efficiency and optimize the number of personnel in additional offices.

Important in 2007-2010 was paid to the creation of a corporate information warehouse of the bank. Today, the technical infrastructure of the data loading, storage and export system has been created, as well as the formation of consolidated statements in key business areas.

Document flow

Another key priority of VTB was the automation of document management. The created system provided a transparent and effective mechanism for the passage and execution of documents in a single information space of the head office and branches.

Infrastructure projects

The emphasis was also placed on infrastructure projects. Among them, Nazipov noted the introduction of the IBM WebSphere integration platform, the expansion of the capacity of data transmission channels and the creation of a video conferencing system, the construction of a data storage system and the creation of the bank's infrastructure in the Federation Tower.

Notes