Royal Bank of Scotland (RBS) has seen its yearly losses fall from £8.9 billion to £3.5 billion as it continues a transformation project that includes a substantial overhaul of its IT infrastructure.
The bank unveiled its multi-year programme to modernise its technology platforms last year, following what CEO Ross McEwan has previously described as "decades" of underinvestment.
In its full-year results, announced today, the bank said it had made headway with its plans.
“2014 was a year of significant progress for RBS, with a much improved operating profit and major achievements in terms of business reorganisation, cost reduction, capital build and improved IT capability,” said RBS chairman, Philip Hampton.
The simplification process – expected to be complete by 2018 - will include an reduction in the number of core banking systems used across the banking group from 50 down to around 10. The bank’s 80 electronic payments systems will be also reduced to approximately 10, with a bank-wide payments platform introduced to “support all segments, geographies and payments schemes”.
The bank also pointed to investments in infrastructure – such as the separation of batch processing systems – which have resulted in improved resiliency and increased service uptime.
RBS has had significant problems with its legacy IT, leading to a number of high profile outages, most notably an incident in the summer of 2012 which resulted in £56 million fine from the Financial Conduct Authority (FCA) and Bank of England.
“RBS as continued to rationalise, simplify and strengthen operating systems and processes, with a more secure mobile banking platform, faster overnight batch processing and key services available to customers 99.96% of the time,” the bank said.
RBS noted that total restructuring costs increased by £601 million to £1,257 million during 2014, including £378 million in relation to the spin-off of challenger bank Williams & Glyn, and a £247 million write-off of intangible IT assets.
It was reported last year that RBS is creating an entirely new IT infrastructure for William’s & Glyn to enable the separation of 314 branches.