Lloyds Banking Group plans to expand its use of “anonymous” customer data and increase automation in compliance processes, the Financial Times reported, citing an internal memo.
The bank, which serves 28 million customers, aims to reduce annual IT costs by several hundred million pounds by 2028.
As part of the restructuring, Lloyds will reduce the number of internal applications it uses and move other technology services in-house.
In a statement to Retail Banker International, the bank said: “Based on our current strategy, we are transforming our business and accelerating our in-house data and technology capabilities to deliver better and innovative digital experiences for customers. We look forward to setting out our future ambitions at our strategy day in July.”
The bank’s chief technology officer, Vic Wiegler, outlined the changes in a strategic document labeled “Technology Strategy 3.0,” targeting a 35% reduction in technology spending this year compared to 2021 levels.
Between 2021 and 2025, Lloyds has reported £1.5bn in technology savings.
Lloyds intends to increase its revenue by expanding its commercial use of customer data, which includes the sale of anonymized data to overseas businesses.
While this practice is already in place, the bank hopes to expand its efforts. Internal Communications said it aims to develop “technical services as products”, opening up new revenue channels.
Automation will play a major role in regulatory compliance under the new plan. More governance checks are expected to be done automatically and in real time, although some human oversight will remain, according to people familiar with the matter.
The bank plans to phase out 862 internal applications and close 15 data centers, shifting customer data storage to cloud-based solutions.
These measures are expected to generate cost savings from lower technology maintenance and support further investment in IT productivity improvements.
The change comes as chief executive Charlie Nunn prepares to announce a new five-year strategy for Lloyds. This follows previous initiatives launched in 2022 aimed at updating the bank’s technology infrastructure.
An internal review led by Wigler last year found several issues with current practices, including complicated guidance for employees and inconsistent employee training on the new systems.
The review included input from consulting firms Accenture, EY and Gartner.
Lloyds declined to comment on what it described as leaked documents.
A person close to the company said the identified challenges are unique to large-scale technology changes and that many employees support ongoing updates.
