Lloyds Banking Group is planning to expand its use of “anonymised and aggregated” customer data and increase automation in compliance processes, reported Financial Times citing an internal memo.
The bank, which serves 28 million customers, aims to cut annual IT spending by several hundred million pounds by 2028.
As part of the restructuring, Lloyds will reduce the number of internal applications it uses and move more technology services in-house.
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In a statement to Retail Banker International, the bank said: “Under our current strategy, we are transforming our business and accelerating our inhouse data and technology capabilities so we can deliver better and more innovative digital experiences for customers. We look forward to setting out our future ambitions at our strategy day in July.”
“No personal or individual customer data is used, shared or sold, and individuals cannot be identified,” the statement added.
The bank’s chief technology officerVic Weigler, set out these changes in a strategic document labelled “Technology Strategy 3.0,” targeting a 35% reduction in technology costs this year compared with 2021 levels.
Between 2021 and 2025, Lloyds reported £1.5bn in technology savings.
Lloyds intends to increase its revenue by expanding the commercial use of customer data, which involves selling anonymised information to external businesses.
While this practice is already in place, the bank expects to scale up its efforts. Internal communications state the purpose is to develop “technical services as products,” opening the possibility of new revenue channels.
Automation will play a larger role in regulatory compliance under the new plan. More governance checks are expected to be conducted automatically and in real time, although some human supervision will remain, according to people familiar with the matter.
The bank plans to phase out 862 internal applications and close 15 data centres, shifting more customer data storage to cloud-based solutions.
These measures are expected to generate cost savings from reduced technology maintenance and support further investment into IT productivity improvements.
The shift 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 Weigler last year found several issues with current practices, including complex guidance for employees and inconsistent staff training on 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 that the challenges identified were typical for large-scale technology changes and most employees supported the ongoing updates.
The bank recently drew attention for requiring customers to open certain types of accounts online instead of at physical branches, according to The Telegraph.
Lloyds currently has a market value of £58.1bn ($77.6bn).
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