Lloyds TSB is currently the fifth largest banking group in the UK, operating in England and Wales as Lloyds TSB; and in Scotland as Lloyds TSB Scotland. Its other subsidiaries include the mortgage bank Cheltenham & Gloucester; life assurance company Scottish Widows; and finance house Blackhorse.
It has been a good year for Lloyds TSB, which has just reported a growth in profits of 11 per cent to £4.25 billion from 2005. Its UK retail banking arm saw figures rise by five per cent, while its costs decreased by two per cent.
Like the other high street financial institutions it is jittery about bad debts and the money it has set aside for these has risen 20 per cent to £1.56bn. Unlike many of the other leading financial institutions the UK is its key market.
Eric Daniels, group CEO, says: “We have delivered a good financial performance while continuing to build our customer franchises to support future earnings growth. We will continue to extend the reach and depth of our customer relationships while improving productivity and efficiency in 2007.”
In terms of IT, the initial IT transformation programme, begun a couple of years ago, is due for completion this year, but the bank is concentrating its efforts on continual improvements to services levels. Daniels was at pains to point out in his statement in the company results that service delivery for the group was essential to its future.
“We are a customer focused organisation and our improved customer satisfaction scores are an important factor in our continued success,” he says.
The bank believes this puts it in a good position to drive growth through its embedded business model, and to deliver its productivity programme across the business. As well as improving its efficiency and effectiveness, it sees IT as critical in achieving customer satisfaction levels and enhancing its ability to fund increased investment.
It is currently in the middle of a five-year contract with outsourcer Xansa to provide back office processes, but has been continuing to develop the contribution IT is making to the business. In its corporate banking and financial markets division it has updated its data storage capacity by replacing tape drives with a disc-based system.
This has reduced its data volumes by five per cent, as well as cutting replication times. It has also had the knock-on effect of reducing administration and vastly improving business continuity effectiveness. The same part of the Lloyds TSB group has also upgraded its 255 position trading floor with a thin client solution, which it believes will give it significant administrative cost savings, better data security and availability as well as better disaster recovery support.
In terms of regulatory work Lloyds TSB, like the other financial institutions, is still dealing with meeting the legal requirements and has plans in place to use ACI’s Base24-es software for the UK’s Faster Payments Service (FPS) requirements.
When this was announced Darryl West, director of group IT at Lloyds TSB, said: “The move to Faster Payments is an important infrastructure change for us. We are confident that we will be FPS-compliant within the agreed timeframe.”
The group says it will implement a further range of new products and services this year and has already developed a strong risk and control infrastructure that will enable it to drive profitable growth in a controlled and sustainable way. Obviously IT has a major role to play in delivering this growth.
In March, Lloyds TSB announced it would be closing its Indian call centre after implementing interactive voice recognition software that has reduced telephone enquiry numbers.
The company said that since it rolled out the voice recognition call handling system a year ago it recognised a steady decline in overflow calls to the Indian call centre and its staff there will be given new roles.
“We are a customer focused organisation and our improved customer satisfaction scores are an important factor in our continued success”
– Eric Daniels, group CEO, Lloyds TSB