The AIB Group and the Bank of Ireland have announced the creation of a new 50/50 technology services joint venture.
According to the banks, the move will result in the fusing of their respective IT infrastructures with a view to providing IT services on a commercial basis.
Neither bank will have access to the other's customer information. The new venture will provide services to both banks involved as well as other companies in Ireland and abroad.
Under the agreement the new company will provide day to day management of customers' IT infrastructure, new IT infrastructures, help desk management and business continuation services.
The new venture will be located in a single business unit and will be managed independently with its own CEO and management team. It will employ 700 people when fully operational.
"This joint venture will have the scale and the resources to compete for business in Ireland and elsewhere," Mr Cyril Dunn, chief information officer with the Bank of Ireland.
"Its transaction levels will compare with those of major banks in Britain and Europe and it will bring together a range of skills in both organisations that stand comparison with the best in any market."