Banks are quietly moving from Hitachi Vantara technology to services

Retail banking remains the most visible segment of the global banking market, with the greatest alignment and exposure to consumer behavior and sentiment. The tension between what consumers want and what banks provide has driven nearly a decade of sexy front-end digital investment to help banks defend against fickle customer loyalty. In our post-pandemic world, the top imperative for retail banks has shifted from digital engagement to front-to-back modernization. To succeed, digital innovation efforts must permeate banking operations and modernized core systems to enable new forms of value for end customers. Retail banks will get there with the help of their ecosystem partners.

In our recent study, HFS Horizons: The Best Service Providers for Retail Banks, 2023, we evaluated 21 retail banking service providers, all vying to help banks achieve the front-to-back modernization mission, including Hitachi Vantara.

Although Hitachi Vantara is well known for its products and services in the industrial domain, it is not new to providing digital transformation services to the financial services industry. It has served this industry for more than 25 years and over 3,100 modernization initiatives under its belt spanning public cloud, applications modernization, and private cloud. However, only after it verticalized its go-to-market approach about a year ago did it begin working to gain overdue recognition in financial services and other sectors outside its manufacturing comfort zone.

Hitachi Vantara offers more for banks than data storage

In 2020, Hitachi Vantara (former Hitachi Data Services) merged with Hitachi Consulting Services to form an enhanced Hitachi Vantara, a provider of technology and services to, yes, industrial and manufacturing sectors, but also financial services, energy, healthcare, retail, and the public sector. About a year ago, the firm decided to verticalize to better showcase its capabilities by industry. It invested in new financial services leadership and continues to hone its banking-specific propositions.

Hitachi is not shy about leveraging decades of experience in data storage, data management, and infrastructure and augmenting it with cloud and data modernization capabilities. It has proven capabilities in the engineering and architecture of private, hybrid, and public clouds and risk and regulatory data management. While it still derives most of its financial services revenue from products, its share of services revenue is growing year on year.

Banking clients see the value but wish Hitachi Vantara had a more visible reputation

One global financial institution shared its Hitachi Vantara journey with us. The relationship started with storage technology and outsourced Level 2 storage services operations. When the client was tapped to establish a public cloud infrastructure from scratch, it chose its team from Hitachi Vantara. They are now three years into the cloud relationship, and the scope has continued to expand from infrastructure and engineering to application development and cloud security. The client suggested, “It would be easier to get value if I did not have to convince my management that Hitachi is good. They need better marketing around their financial services capabilities.”

In another HFS Research report, To manage the complexity of cloud-native transformation, simplify your strategy, we explored how an existing Hitachi Vantara client, Raiffeisen Bank International (RBI), tapped into its services for cloud modernization. The RBI journey, supported by consulting and engineering teams from Hitachi Vantara, is a compelling example of capturing value by focusing on business outcomes and reshaping the entire technology platform rather than getting lost in a race to save cost. Hitachi also helped RBI capture value by focusing on cultural change and operating model transformation.

The Bottom Line: Hitachi Vantara has the necessary capabilities to become a solid partner for banks on their front-to-back modernization journeys; it just needs to showcase its skills better.

Hitachi Vantara needs to aggressively and openly position itself as a technology and services company with proven experience in the financial services domain. Banks already leveraging Hitachi Vantara for its strong data storage capabilities (where they are already likely vetted providers) should consider testing Hitachi Vantara’s services capabilities. Look for opportunities aligned to data migration to the cloud as a use case with impact aligned to the technology baseline.