International Business Machines Corporation’s (IBM - Free Report) Services were recently selected by Banco Inter. Notably, Banco Inter has been touted as Brazil's "first fully digital bank". With the collaboration, the Brazilian bank attempts to make migration of its workplace platform to Apple’s (AAPL - Free Report) Mac Operating System (“OS”) seamless.
Banco Inter’s client base of 1 million can be attributed to its facility of free checking account. In fact, the bank is also witnessing increasing new accounts of almost 4,500 per day. These factors have compelled the bank to digitize its financial services.
Consequently, Banco Inter has acquired 1,000 Macs and teamed up with IBM Services. Per the deal, IBM’s Managed Mobility Services for Mac will support the bank to upgrade its software, run multiple devices, and integrate the financial apps into the Apple infrastructurein an organized and secure method.
We believe IBM’s partnership with Apple (since 2014) enhances Banco Inter prospects to tap into the benefits of Mac OS. Further, IBM has been a pioneer when it comes to helping businesses, financial institutions, healthcare providers, and governments, among others to digitally transform and evolve.
Notably, IBM’s stock has returned 1.9% in the past year, compared with the industry’s rally of 5.9%.
What the Investors Should Know
The collaboration strengthens the company’s growth prospects in the digital transformation space. Per a MarketsandMarkets report, digital transformation market is envisioned to grow at a CAGR of 19.1% to $493.39 billion by 2022 from $205.99 billion in 2017.
As a result, IBM seems well-positioned to capitalize on projected growth. The report only reinforces our belief that IBM’s services hold immense potential.
The tech giant continues to bring innovation to services to help the enterprises, government agencies, leverage the emerging technologies, including the likes of cloud, artificial intelligence (AI), Internet of Things (IoT), among others.
In the words of JoãoVitorMenin, President of Banco Inter, “Due to their partnership with Apple and great expertise, IBM is the only provider in Brazil that is able to implement and manage Apple MacOS devices in the corporate environment."
This deal is also expected to bolster IBM’s presence in Brazil. We believe the ongoing deal with its notable partner base, including Apple, will eventually aid IBM in competing against peers.
The collaboration is a win-win situation for both the companies. IBM Services’ advanced capabilities makes its offerings well poised to gain robust adoption. The traction witnessed by the company’s services will bolster the top line.
Banco Inter believes that the strengthened workforce will eventually assist the company to provide its clientele with enhanced services with better engagement. This will in turn lead to more customers and aid the bank to realize its business goals.
Zacks Rank & Key Picks
IBM currently carries a Zacks Rank #3 (Hold).
Salesforce.com Inc (CRM - Free Report) and KLA-Tencor Corporation (KLAC - Free Report) , both sporting a Zacks Rank #1 (Strong Buy), are stocks worth considering in the same sector. You can see the complete list of today’s Zacks #1 Rank stocks here.
Salesforce and KLA-Tencor have a long-term earnings growth rate of 25% and 9.8%, respectively.
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