The sleek, new office in Tallinn’s hippest quarter looks like a successful startup, yet offers the security of an established global company.
Agnes Makk, Director of Arvato Financial Solutions IT Centre in Estonia, recalls being one of the 60 test interviewees some 4 years ago, when Arvato first started exploring the Estonian capital as a location for its innovation and development centre: ‘What made Bertelsmann consider Estonia as a location in the first place was the IT success story of Estonia.
The Bertelsmann Foundation, which holds the majority of capital shares in the Bertelmann Group together with the Reinhard Mohn Foundation and the BVG Foundation, gives a global award for outstanding achievements annually and Estonia’s former President Toomas Hendrik Ilves has received this award for the digitalisation of Estonia. So, it was a natural choice to look to Estonia when the company started searching for a new location for its IT development centre. The aim was not to find the place with the cheapest labour cost. Likeness to the German culture and work ethic played an important role in the final decision: pragmatism, the cultural fit and the availability of IT specialists. An added argument was the excellent technological level of banking in Estonia, as we started as a Fintech developer primarily. The skilled IT workforce with a background in banking was available. As we didn’t plan to hire 1000 people but rather about 100, this seemed doable. There were a few Eastern European countries in the final selection. Estonia was chosen after the 60 test interviews, which proved the availability of skills and types of mindset.’
This sounds like a case that proves that the digital ‘wonderland’reputation of Estonia is not just a PR bubble but rather an important argument for real investments?
Agnes Makk: ‘We pay at least double the Estonian average salary and we can offer great opportunities for career growth in a global group of companies, working in international teams and international customers by developing large systems. We have hired many people via the cyber security master’s programme of TalTech, which is highly sought after by international students. The university has thus already done a good job in selecting the brightest, and they fit really well into our team. We are looking to grow the Security Operations Centre strongly in the coming years. Estonia has a great reputation in this field and the need for these services is growing. Today we have 15 people, soon to be doubled.
Thanks to the university programmes, we are able to tap into international talent. This is the most multinational team with only one Estonian, we are very happy with their skills and knowledge. The Security Operations Centre was not even included in the original plan of the AFS IT centre, just as it turned out to be a field with a very able workforce, it grew naturally as a new line of business. Cyber security has become a big issue for literally every company, thus Bertelsmann wanted to develop this line stronger and, when looking for people with special skills, Estonia was the obvious choice.
It looks like our teams are working really well and, as the Bertelsmann group is so huge, there is actually no ceiling for growth.’
Focus on cyber security and e-commerce solution
‘We are considered a strategic IT centre as we are developing cyber security and the two major e-commerce solutions for the group – both areas are a special focus right now,’ says Makk. ‘AFS Estonia now offers development services to companies of the Bertelsmann Group mainly in Germany and the Nordics, among them are Arvato call centres in Germany as well as Arvato Systems, the Security Operations Centre of the group. The services now also include IT support and testing. The majority of the turnover comes from IT development and architecture, with all the clients of the company coming from abroad. We do not have a single client in Estonia. The largest team is developing AfterPay – the pay-after-delivery solution that is well-established in the Benelux and Nordic countries as well as in Germany. We are also developing the PayNext platform – one of the biggest payment platforms in Germany.
A new line of business is a content management solution for one of the largest media companies in the world – we’re building a system that recognises and deletes inappropriate content.’
An international company in Estonia
In the Bertelsmann group of 120 000 employees, the Tallinn IT centre is only a drop in the ocean. Makk says they are hoping to grow: ‘Today we have hired 40% foreigners, many of them alumni of the University of Tartu or TalTech. Among our 77 employees we have 20 nationalities, so the company’s business language is English. Luckily, the IT sector is exempt from the immigration quota in Estonia and the process of residency and working permits is fast and smooth compared to Germany or Scandinavia. Estonia is very keen to welcome highly educated IT specialists.’
To further promote the expertise of IT specialists in Estonia, AFS has signed a strategic partnership contract with TalTech and the University of Tartu. It supports both local institutes with 15 000 euros to further promote scientific work and education around IT issues – and in turn, invest in the digital future of Arvato Financial Solutions.
Arvato Financial Solutions is a global financial service provider and part of Bertelsmann SE & Co. The company has over 7000 employees in 20 countries, including a strong presence in Europe, America and Asia. AFS provides optimum and secure payment flows for more than 10 000 customers from the trade, telecommunications, insurance, credit and health industries worldwide with their financial services. This makes the company Europe’s third largest integrated financial service provider.