RBS has announced a review of IT operations as it seeks to improve retail bank performance and reduce costs.

In its third quarter financial results, the banking group, which is 81% owned by the taxpayer, said that it had begun a widespread company review. A core part of the review will see the bank ask, "How do our operations and IT systems function for the benefit of customers? How do our core systems help or impede our employees in their work for customers?"

The RBS results statement declared: “The review will aim to improve the bank’s performance and effectiveness in serving its customers, shareholders and wider stakeholders. This will include detailed plans to realign the Group’s cost base, with a cost:income percentage target in the mid 50s, down from 65% currently.”

RBS attracted 1.3 million customer complaints last year, excluding PPI complaints, with many of the customer service problems stemming from its legacy IT systems, according to a seperate government report, which recommended not to create a 'bad bank' to hold RBS's worst debts.

“At present, the business is extremely complex and relies on legacy systems. This results in mistakes, poor customer service, and cost inefficiency,” the Treasury report noted.

“RBS is a very complex business that is difficult for our employees and the outside world to navigate...realising the full potential of our customer businesses is now our major challenge and opportunity,” said chief executive Ross McEwan.

The results of “comprehensive” review, which is part of wide ranging plans to prepare the bank for re-privatisation, will be announced in February 2014 alongside the group’s 2013 financial results.