BNP Paribas and 3 Step IT push on with “aggressive” tech recycle plan
3 Step IT, a Finnish firm which cuts down technology waste, has partnered with BNP Paribas to roll out an “aggressive” tech-fuelled recycle plan across Europe.
The firm, founded back in 1997, manages some 2.2 million assets for customers. It owns refurbishing centres in Finland, Sweden, Norway and Malaysia.
It claims to sell 98% of the technology which comes back to it, giving a second life to PCs, laptops, tablets and smartphones – among other hardware.
Queue BNP Paribas
BNP Paribas, the world’s eighth largest bank by assets, has decided to embark on a joint venture with 3 Step IT to turbo charge recycled technology use.
The firm’s funding partners include HSBC and Nordea, in addition to providing its services to BNP Paribas’ corporate and government clients.
“They [the bank] have the funding, and knowledge of risk,” IBM veteran Carmen Ene, who now heads up 3 Step IT and the new part-bank venture, tells FinTech Futures.
Ene met the CEO of BNP Paribas’ leasing solution arm, Charlotte Dennery, three years ago at an industry conference. “The bank wanted to move into sustainable investments,” Ene explains.
“And it wanted to expand [its Transaction Lifecycle Management] into rest of Europe, beyond the Nordics.” Something 3 Step IT also wanted to do.
BNP Paribas Leasing Solutions specialises in financing solutions for professional equipment. These solutions are offered either directly or through a manufacture or IT supplier. The division claims to hold almost €30 billion in assets under management.
Whilst the French multinational bank brings its clients, money and risk appetite to the table, Ene says 3 Step IT brings its know-how on how to manage the assets and delete information securely at the end.
“Aggressive” expansion plan
Together, the two entities are embarking on an extensive European expansion trajectory. Already operating in the UK, France and Italy, the new venture launched in Germany just last month.
Next on the list are Belgium and the Netherlands, with plans to expand wider to countries like Poland, Switzerland and Austria.
“It’s quite an aggressive move in almost one year’s time,” says Ene.
Last year, 3 Step IT’s revenue stood at €682 million. It employs around 400 people in the Nordics, with another 150 people in the joint venture with BNP Paribas based outside the region around Europe.
This year, in the wake of a global pandemic and national lockdowns, IT spend for firms has gone up. It’s seen firms invest in systems which work from an employee’s home, without incurring unnecessary risk.
“It’s an incredible moment now,” says Ene. “With WFH, and e-learning – there’s a huge investment in smart devices.
3 Step IT did a survey with 172 decision makers across the banking and insurance industry. It found 87% had purchased additional hardware during the pandemic, and that 55% considered IT transformation a “key driver” for IT spend.
Language around ‘sustainable investment’
Asked why companies care about recycling their technology, Ene cites the world’s Environmental, Social, and Corporate Governance (ESG) goals.
These goals have prompted banks specially to write in sustainable investing to their business models, having historically contributed to global warming through mining investments.
“More than 170 of these [goals] are based on smart cities and technology in Europe,” says Ene.
“Which means there’s a need for cheaper and more sustainable offerings. That’s why we’re seeing investments across industries.”
Europe alone has identified a yearly financial gap of more than €180 billion in sustainable investments which would keep the global temperatures in line with the objectives of the Paris Agreement.
But Ene still thinks the conversation around sustainable investment needs to change.
“When people talk about sustainability, they don’t talk about technology,” she says. The CEO points to funds like BlackRock, which have raised more than $900 million to invest in the circular economy, as opposed to just ‘green-friendly’ initiatives.
Ene thinks the hardware companies use – and the wastage it creates with no upcycling system in place – often slips people’s minds.
How it works
3 Step IT will take care of technology from acquisition, through its lifetime, to repossession, refurbishment, re-selling and eventual end-of-life.
If a BNP Paribas customer wants to buy a set of PCs, the bank will provide 3 Step IT with the funding, and it will take care of the rest.
The firm makes money through a subscription-based, monthly payment model. “In turn, we take on the risk of residual value,” explains Ene.
Firms can then reinvest some of this residual value, which is paid out to them at the end, for new equipment.
“We put order into chaos,” says Ene. “Customers don’t have to own anything.”
If they did, they’d have to do their own financing, and their own vendor checks.
3 Step IT acknowledges it has competition in the space. But Ene argues no company owns the end-to-end model like 3 Step IT does.
“Our competitors do bits – asset management, funding, or the refurbishment – but not the whole lifecycle.”