Danske Bank's IT center located in India is set to be taken over by Infosys as part of a $454 million five-year IT outsourcing deal designed to speed up the bank's digital transformation.

Infosys said on June 26, 2023 the company had obtained a $454 million contract from Danske Bank to help realize the bank's digital transformation ambitions.

The contract is for five years with the ability for renewal for an extra year up to three times.

According to Danske Bank Chief Operating Officer Frans Woelders, the deal is part of the company's "Forward '28" business plan, which includes growing yearly investment in digital platforms.

"Our Forward ’28 strategy sets clear ambitions for Danske Bank to be a leading bank in a digital age," Woelders stated. "This is backed by significant investments in digitalization and technology, including plans to further develop our customer-facing digital solutions, and modernizing our technology infrastructure to enable even better customer experiences and drive operational efficiency.”

Salil Parekh, CEO at Infosys

"Infosys will collaborate with Danske Bank to strengthen their core business with greater digital, cloud and data capabilities," stated Salil Parekh, Chief Executive Officer and Managing Director of Infosys. "This will help Danske Bank create more value for their customers using powerful advances in AI, including generative AI."

The transactions are expected to be finalized by the second quarter of FY2024, according to Infosys. Despite the recession, several IT service providers are again securing contracts for customers' digital transformation.

Danske Bank's choice, according to Peter Schumacher, CEO of management consulting firm The Value Leadership Group, is a "déjà vu" moment in IT: "It's a strategic reversal bringing them back to where they were 20 years ago."

"It is a complex multi-directional challenge and many parent companies will often prefer to maintain a status quo of mediocrity for many years before making the needed changes to improve performance," he said.

Then Schumacher added that "more often than not the problem resides and compounds at the parent organization where the focus is on cost reduction, incremental improvements, stability and control rather than on creativity and innovation, and most importantly building system advantages. Corporate executives typically will define the captive’s role according to how they see its importance and more often than not this view is shaped by yesterday’s assumptions."