VTB IT Budget

IT at VTB

Main article: Information technology in VTB Group

2023

VTB wrote off 6.4 billion rubles due to failed IT projects

On December 22, 2023, VTB announced major write-offs due to unsuccessful IT projects, including the launch of an online bank in Telegram and non-working applications on iOS.

One-time items of expenses amount to 12.5 billion rubles, of which write-offs, IT, intangible assets are 6.4 billion rubles, that is, half of this, the rest of the impairment of non-core assets, "Dmitry Pyanov, First Deputy Chairman of the VTB Board, told reporters (quote from the Prime agency).

VTB reported major write-offs due to unsuccessful IT projects

He clarified that the bank "overestimated several non-financial assets" in November 2023. As a result, "a large number of intangible assets were written off, for which further use will be limited or impossible," Pyanov said. According to him, among other things, investments in an online bank in Telegram were written off, as well as old, unsupported solutions of an iOS-based mobile bank in the retail business.

At the beginning of 2023, VTB launched the work of an online bank in Telegram, but a few weeks after that Russia , the norms of the law came into force, which prohibit organizations from using foreign ones messengers to transfer payment documents and personal data when providing services. As a result, on July 1, 2023, VTB's banking service moved from Telegram to the social network "."Vkontakte

As conceived by the bank, the digital bank in Telegram was supposed to become a full-fledged replacement for the bank's mobile applications in iOS. After the imposition of sanctions against VTB in 2022, the bank's official application was removed from the App Store. New versions of mobile applications with other names released by the bank were also removed from the App Store. The bank's last application - "Everything is simple" - was disabled on December 15, 2023.^[1]

VTB pledged 160 billion rubles for digitalization in 2024

VTB pledged 160 billion rubles for digitalization in 2024. This was announced by the chairman of the board of the bank Andrei Kostin on November 8, 2023. According to him, most of the IT budget is provided for projects in the field of artificial intelligence.

Kostin believes that in the banking sector, the use of artificial intelligence will be one of the important competitive advantages of precisely those financial structures that can achieve this.

VTB will spend 160 billion rubles on digitalization in 2024

According to the press service of VTB, the bank has competencies in almost all key areas of AI use, including computer vision, text and geo-analytics, optimization technologies. In all these areas, AI allows you to provide better services, increase security, and optimize costs. The cumulative confirmed effect of the introduction of AI in key business areas at VTB by November 2023 amounted to almost 10 billion rubles.

Andrei Kostin, speaking at the forum of financial technologies organized by the Central Bank of the Russian Federation, called on the regulator to adjust regulation to reduce bank costs for the introduction of new technologies. This will stimulate the development of banking services based on artificial intelligence solutions, making it less expensive for customers, the head of VTB said.

According to him, before artificial intelligence brings banks a significant economic effect, credit institutions face considerable costs. Kostin noted that by November 2023, VTV "is forced, and this is natural, to invest a lot of money in the development of information technologies, including artificial intelligence."

Sberbank already earns more than it spends [on AI implemented in different processes]. We have not yet reached this stage, but the process is underway, "the banker admitted.[2]

2020-2022: VTB spent almost 300 billion rubles on digital transformation in three years. The next stage will be held under the slogan "Technological sovereignty"

In 2020-2022 spending VTB on digital transformation amounted to 291.3 billion, Deputy rubles President and Chairman of the VTB Board said at a press briefing on June 6, 2023. In Vadim Kulik 2022, the strategic cycle of the transformation program ended, as a result of which, according to VTB, a "technologically new bank was created that meets the best industry standards in terms of reliability, fault tolerance and import independence."

The unification of information systems was carried out, the product backlog was eliminated, the level of reliability was increased, a new production process was created. TAdviser wrote more about what was done as part of VTB's digital transformation a few days earlier following the TAdviser SummIT conference, where a bank representative also spoke (see here).

Answering a TAdviser question at a press briefing on June 6, Vadim Kulik said that with the completed phase of the digital transformation program, IT development is not pumped into VTB, but the budget for this is now smaller. For the next strategic period, designed for the period 2023-2025, the amount of funds for IT programs in relation to the peak 2021 will decrease and fits into the amount of up to 100 billion rubles.

In 2022, VTB completed the strategic cycle of the transformation program "(photo: VTB)"

The bulk of the budgeted budget will be for import substitution, added a top manager at VTB. The slogan of this strategic period is "Technological sovereignty."

Over the past few years, VTB has already done a lot of work to approach technological independence. VTB claims that at the moment more than 60% of its IT landscape has been transferred to import-independent platforms and solutions.

Of the specific examples, 75% of the bank's employees stopped using. Microsoft Office The share of use DBMS PostgreSQL reached 74%. Migration Oracle with brought, among other things, a significant economic effect. When almost all of the bank's systems used Oracle, this led to the fact that only for support had to pay about $150 million a year, Vadim Kulik shared.

70% of application servers have been transferred to the import-independent WildFly solution in VTB, and 33.5 thousand virtual machines of the bank are deployed in the OpenStack cluster. In addition, 5.3 thousand of the bank's servers have been transferred to the Russian Astra Linux OS.

However, there are still big challenges here. Thus, the layers of ABS and card processing, represented by highly loaded systems, remain highly dependent on imported technologies, in particular, from Oracle, explains Vadim Kulik.

A big problem exists with the replacement of hardware, especially in the high-performance segment, where IBM is among the leading vendors. Import substitution of software products allows you to switch to simpler hardware solutions that are already beginning to be produced in Russia. Banks will be provided with "consumer" iron.

But the main challenge here is how to abandon imported systems - here we are talking, again, about ABS and processing - that cannot work on this simple hardware. The task is complicated by the fact that this must be done in a very short time - in 2-3 years, while everyone who bought IBM and others has a resource reserve. In February 2022, everyone was actively purchased by such import solutions for future use, said Vadim Kulik.

At the same time, import substitution is, although important, but not the only task for 2023-2025. Within the framework of the new strategic period, as before, VTB plans to implement various programs. Some of them became a continuation of the previous ones. For example, the Reliability program, which was implemented as part of a digital transformation earlier, has now turned into the Continuity program, which focuses on services.

Among the challenges of VTB's technological transformation for 2023-2025 are the creation of fundamentally new business solutions and the improvement of existing business platforms on a new technological foundation created as part of the transformation.

Also, for example, there will be the implementation of programs aimed at joining new financial assets (Otkritie Bank), creating a product and replicating VTB's experience to organizations within the group and other strategic enterprises within the country. The bank plans to build a new platform for inter-country settlements taking into account sanctions risks.

2019: More than 80% increase in IT spending

In 2019, VTB Bank's IT expenses (in the company's statements they are called expenses in the "field of scientific and technical development") amounted to about 39.4 billion rubles. This is 81% more than in 2018.

This amount includes expenses, including the purchase of equipment for the development of computing complexes, telecommunications infrastructure and workplace infrastructure in the amount of about 13 billion rubles. This item of expenses more than quadrupled: in 2018, costs for the same purposes amounted to 3.1 billion rubles, according to VTB reports.

VTB explained to TAdviser that the increase in IT costs in 2019 against 2018 is explained by two groups of factors:

• Updating infrastructure equipment and the fleet of user workplaces after a large-scale inventory following the merger of the VTB24 in 2018 (70% increase in expenses);
• The opening of a number of new IT projects and the transition to the active investment phase of transitional projects (30% of the increase in expenses). Projects that have been started in previous periods in accordance with the approved investment program are referred to as transitions.

Three project groups stand out:

• Create a new customer experience. As an example, the bank cited the creation of a new system of remote banking service for corporate clients);
• Automated internal processes of the bank. For example, ERP, improvements to accounting systems for the transition to IFRS);
• Cross-functional and infrastructure (private cloud, DevSecOps).

70% of the increase in IT costs was ensured by the renewal of infrastructure equipment and the fleet of equipment for user workplaces after a large-scale inventory following the merger of the VTB24 in 2018 "(photo - Olga Zinovskaya/TASS)"

In the quarterly report, among the most significant events in 2019 is the launch of its own mobile virtual operator - VTB Mobile. VTB expects that it will help the bank form a single ecosystem of financial and telecom services for customers, increase loyalty and enable VTB itself to save on communication services, obtain additional data on customers and develop internal telecom expertise.

The bank also ensured the collection of customer data within the framework of a unified biometric system in its branches in all regions of presence. Another project is the launch of a system for monitoring the data transfer process to credit bureaus. Within the framework of the new system, automatic checks of the readiness of files with data on credit histories, checks of exports and receipt of files of credit histories are carried out.

Another example from the quarterly report is the launch of the Roboedvizer service in the VTB My Investments application. According to the company's statement, Roboedvizer is the first investment portfolio selection service on the Russian market that supports rebalancing functionality. If the securities of the selected portfolio deviate from the recommended parameters, the client receives a notification and an offer to balance the investment. The recommendations of the robo-adviser are developed on the basis of the expertise of the VTB Capital analytical team.

2018

In the 1 quarter of 2018, the IT expenses of the combined VTB amounted to 3.86 billion rubles (including 138.8 million for the purchase of equipment), in the 2 quarter - 3.48 billion rubles (for equipment - 315 million), follows from the bank's statements.

Completed in 2018, the planned migration of the IT infrastructure of the automated banking system (ABS) of the ex-Bank of Moscow to the VTB private cloud platform has reduced the bank's operating costs by 10 million rubles per month since May 2018 by removing outdated equipment from technical support, the documents say.

Read more about VTB's IT projects in a separate article.

2017

The merger of VTB and VTB24 led to a reduction in IT costs

The IT budget of the combined VTB and VTB24 for 2017 turned out to be noticeably less than the amount of separate IT budgets of the two banks in 2016, follows from the statements of the combined bank.

In 2017, VTB significantly reduced its IT budget due to the move of information systems to the private cloud

In 2017, expenses for informatization and digital transformation amounted to 11.563 billion rubles, including the purchase of equipment for the development of computing complexes, telecommunications infrastructure and workplace infrastructure - 5.211 billion.

The total expenses of VTB and VTB24 in 2016 amounted to 18.82 billion rubles, of which 5.22 billion were invested in equipment (see more below).

In 2017, VTB's private cloud platform and new infrastructure services were deployed, and then about half of the bank's top 50 information systems were migrated to the cloud. The cost of IT infrastructure for most migrated applications has decreased. On average, a cost reduction of 52% was recorded, and the performance of applications increased 1.5-5 times, the bank said.

Read more about VTB's IT projects in a separate article.

Kostin: VTB annual spending on information technology amounts to about $850 million

VTB's annual spending on information technology is about $850 million, the bank plans to increase them, VTB head Andrei Kostin said in an interview with RIA Novosti in September 2017.

Our IT costs are about $850 million a year. And Sberbank said that it spends more than a billion. But still, JP Morgan is spending $9 billion, so it makes sense to see what they invent there. You don't have to invent everything yourself. You need to be able to quickly implement the new developments that have appeared in the world, - said Kostin

2016

VTB Bank

In 2016, IT expenses of VTB Bank (in the company's statements they are called expenses "in the field of scientific and technical development") amounted to 7.47 billion rubles. This is 88.6% more than the cost of similar needs a year earlier.

Of this amount, about 3.62 billion rubles were spent on the purchase of equipment for the development of computing complexes, telecommunications infrastructure and workplace infrastructure, which is about 352% more than in 2016.

For the nine months of 2016, VTB Bank's IT expenses (in the company's statements they are called expenses "in the field of scientific and technical development") amounted to 5.28 billion rubles. Of these, 3.28 billion rubles were spent on the purchase of equipment for the development of computing complexes, telecommunications infrastructure and workplace infrastructure. Compared to 2015, expenses on these items increased by 85% and 465%, respectively.

VTB 24

The IT budget of VTB24 Bank (in the company's statements it, like VTB Bank, is called expenses "in the field of scientific and technical development") in 2016 amounted to 11.35 billion rubles. This is about 7.8% more than a year earlier.

Of this amount, the bank spent about 1.6 billion rubles on the purchase of equipment for the development of computer complexes, telecommunications infrastructure and workplace infrastructure. Expenses for these purposes decreased by about 34% compared to 2015.

In the first 9 months of 2016, VTB24 spent 8.69 billion rubles on IT. Of this amount, 1.37 billion rubles were spent on the purchase of equipment for the development of computer complexes, telecommunications infrastructure and workplace infrastructure.

Member of the Board and Director of the Department of Banking and Information Technologies of the VTB24 Sergey Rusanov in September 2016^[3]that in 2017 the IT budget may increase by 10-20%.

2015

VTB Bank

In 2015, the bank's IT expenses VTB amounted to 3.96 billion. rubles Of these, about 0.8 billion rubles were spent on the purchase of equipment for the development of computing complexes, telecommunications infrastructure and workplace infrastructure.

VTB 24

In 2015, IT expenses of the bank VTB 24 amounted to 10.53 billion. rubles The bank spent about 2.42 billion rubles on the purchase of equipment for the development of computing complexes, telecommunications infrastructure and workplace infrastructure.

2014

VTB Bank

In 2014, VTB Bank's IT expenses amounted to 3.16 billion rubles. Of these, about 0.84 billion rubles were spent on the purchase of equipment for the development of computing complexes, telecommunications infrastructure and workplace infrastructure.

VTB 24

In 2014, VTB 24 Bank's IT expenses amounted to about 10 billion rubles. The bank spent 3.48 billion rubles on the purchase of equipment for the development of computing complexes, telecommunications infrastructure and workplace infrastructure.

2013: The group's planned budget is 18 billion rubles

The IT budget of the entire VTB Group planned for 2013 amounted to $580 million (about 18 billion rubles^[4].

Notes