Lloyds Banking Group is planning to lower its annual technology costs by switching its computer systems to a new platform. It is the second largest bank after Goldman Sachs to create a digital wealth management product that is helping everyday people to invest their money.
The “Vault” core banking platform is cloud based and it’s developed by the fin-tech start-up Thought Machine. The British high-street lender is intending to cut hundreds of millions of pounds costs by transferring the data for about 500,000 customers from its old Intelligent Finance brand to the new platform and if the operation is successful, Lloyds could schedule a similar transfer among all of its business through the next few years.
Lloyds’s current annual costs for IT running and improvement are about £2.2b and the expected 35 to 40% expenses reduction could save it more than £750m per year.
Lloyds’s costs to revenues ratio is already one of the lowest among Britain’s high-street banks and it is aiming to even decrease these results.
This is the latest trend in the bank industry aiming to benefit the everyday’s life of the average people in the field of financial services.
Although switching to the new “Vault” banking platform would save a lot of costs for Lloyds Banking Group , it is also provoking apprehension among unions regarding possible massive job losses.
The general secretary of the independent BTU union (representing approximately 20,000 Lloyds staff), Mark Brown, said: “The bank knows when and where jobs will be lost as a result of the implementation of Thought Machine’s core banking platform and it should publish that information immediately. Hiding that information from staff is unacceptable.” In order to avoid mandatory redundancies, as part of its technology alteration, Lloyds is planning to relocate big amount of the positions to new centers specializing in digital processes.