Lloyds Banking Group is embarking on a strategic plan to expand its utilization of anonymized customer data and enhance automation in compliance processes, as per a report by Financial Times referencing an internal memo. With a customer base of 28 million, the bank aims to reduce annual IT spending by several hundred million pounds by 2028.
The restructuring plan includes a reduction in the number of internal applications used by Lloyds and a shift towards bringing more technology services in-house. In a statement provided to Retail Banker International, the bank highlighted its commitment to transforming the business and enhancing in-house data and technology capabilities to provide improved digital experiences for customers. The bank is set to unveil its future ambitions at a strategy day scheduled for July.
Chief Technology Officer Vic Weigler outlined these changes in a strategic document called “Technology Strategy 3.0,” with a target of reducing technology costs by 35% this year compared to 2021 levels. Lloyds reported ÂŁ1.5bn in technology savings between 2021 and 2025.
To boost revenue, Lloyds plans to expand the commercial use of customer data by selling anonymized information to external businesses. While this practice is already in place, the bank intends to scale up these efforts to develop technical services as products, potentially creating new revenue streams.
Under the new plan, automation will play a more significant role in regulatory compliance. Governance checks are expected to be conducted automatically and in real-time, although some level of human supervision will be retained. The bank also aims to phase out 862 internal applications and close 15 data centers, transitioning more customer data storage to cloud-based solutions.
These measures are anticipated to generate cost savings from reduced technology maintenance and support, allowing for further investment in IT productivity enhancements. The upcoming five-year strategy announcement by Chief Executive Charlie Nunn follows previous initiatives launched in 2022 to update the bank’s technology infrastructure.
An internal review conducted by Weigler last year identified several issues with existing practices, including complex guidance for employees and inconsistent training on new systems. Consulting firms Accenture, EY, and Gartner provided input for the review.
Lloyds declined to comment on what it referred to as leaked documents. However, a source close to the company mentioned that the challenges identified were typical for large-scale technology changes, and most employees supported the ongoing updates.
The bank has recently garnered attention for requiring customers to open certain types of accounts online rather than at physical branches, according to The Telegraph. With a market value of ÂŁ58.1bn ($77.6bn), Lloyds is focused on enhancing data commercialization and governance automation to drive its future growth.
