Standard Life has raised its cost cutting targets by nearly half, to £350 million by 2012, as it reported strong progress on a technology and process overhaul.

The insurance and pensions firm said IT improvements, the automation of processes, and the outsourcing of some of its software development had helped it cut £47 million from costs in the year to 31 December. It was orginially targeting £75 million cuts by the end of the year, but said today a further £100 million would be cut by 2012.

The new £100 million savings, the bank said, will come from “transforming” its operations to be “lower cost and scalable”, while remaining “robust” and maintaining “the quality of customer service”.

On top of the £175 million central efficiency savings, it has also been targeting a further £175 million savings from its Continuous Improvement programme by the end of this year - having cut £100 million from costs by 2008. That scheme is focused on process and infrastructure standardisation, and an overhaul of finance, marketing and human resources operations.

David Nish, chief executive at Standard Life, said in a presentation to investors that having strong technology, reusable services, “straight through processing” and better procurement would deliver the efficiency improvements.

As the bank reported operating profits for the year slipped 1.5 percent to £919m, it put technological innovation at the heart of growth alongside its brand and customer service.

Standard Life has made a number of IT and process changes in recent years. In 2009, it adopted Oracle Identity and Access Management in an attempt to improve customer and partner access to its online services. Using the system globally would reduce costs as well as improve security, it said at the time.

The insurer has also developed its service-oriented architecture, which in the three years to 2007 saved £16 million in development costs. Improvements to document management with the upgrade of its scanners have also saved £1.1 million.