Lloyds TSB is set to merge with HBOS to create a banking giant as the financial sector faces difficulties following on from the collapse of Leman Brothers in the US. The merger, which the government is likely to approve will create wide ranging redundancies. Perhaps by virtue of its size and having only the UK as its key market, making it the fifth largest banking group in the UK, Lloyds TSB Group has felt comparaLloyds TSB is set to merge with HBOS to create a banking giant as the financial sector faces difficulties following on from the collapse of Leman Brothers in the US. The merger, which the government is likely to approve will create wide ranging redundancies. tively less growth pains in the midst of increasing global economic instability. With revenues of £16.9 billion last year, it still registered a balance-sheet item termed a "revaluation reserve reduction" of £740 million that was bigger than the £667 million sub-prime related losses charged against profit.
In the midst of rough times ahead, Lloyds TSB IT strategy looks set to continue to focus on rationalisation and consolidation in response to tougher competitive conditions. In May this year, it announced more IT jobs cuts in the UK as it continued to export many of its technology-based operations to India. “Information technology is the backbone of our business and by combining the diverse skills of our staff with those of other companies we can provide the best possible service to our customers,” stated the bank at the time.
Over the past couple of years the London-based bank has entered into a wide range of outsourcing agreements, the most recent of which saw it extend its relationship with Xansa last November to deliver complex, industry-specific back office processes. And its Indian suppliers include Tata Consultancy Services, Cognizant and Wipro.
But Lloyds TSB told CIO its IT function is independently benchmarked annually, and currently ranked ahead of its peer group in terms of IT value for money. It is particularly proud of its support for women’s advancement in IT, citing the ‘Best use of technology by a woman within the Corporate Sector’ award won by its central functions CIO, Jayne Opperman at the annual BlackBerry Women and Technology Awards 2008 and its place as a group IT finalist in BlackBerry's organisational award, ‘Best Company Advancing Women in Technology’.
The bank also said unplanned service and system downtime had consistently fallen over the last four years and, at the end of 2007, was well ahead of service and operational level agreements. And delivery of many Lloyds TSB strategic programmes and projects as well as regulatory programmes covering, Faster Payments, Sarbanes Oxley (SOX), Basel II, MiFiD have been successful.
“Our simplification agenda means that we will continue to work closely with our business, aligned to our enterprise architecture, to ensure our projects maintain consistency targeting a more agile and flexible technology base, driving costs down and enable quicker delivery,” the bank stated. “We will continue to replace and modernise redundant and complex systems. Our business is committed to our enterprise architecture and sourcing objectives in order to produce simplified systems and create a more agile environment. And we are continuing our accreditation programme for all project managers (Prince 2) and business analysts (ISEB Business Analysis Diploma).”
In terms of the banks’ technology strategy for the coming year, it said it will continue to move towards an environment that separates product processing from account processing and from its service channels. “We have already made significant moves from stovepipe delivery to an agile, component based environment joined up by a message-based architecture that will take us to a more flexible, scalable, agile environment and ultimately enable our simplification and modernisation,” it said.
This technology focused work will be tied to significant implementations around Basel II, the Single European Payments Area (SEPA) and other mandatory regulation programmes over the next year, where it added that security and systems integration would be key. This included “developing our offshore capability in line with our peers, developing strong programme management skills with an internal focus and ensuring we continue our structured recruitment and development of IT talent,” the bank added.