Lloyds Banking Group has confirmed it will cut 9,000 jobs and 200 branches as it focuses on delivering digital services to its customers.
The three-year project was outlined by CEO António Horta-Osório in order to save the bank £1 billion by 2017, as demand shifts from branch-based services to online and mobile banking.
“Over the next three years, we need to adapt to the changes in financial services brought about by technology, changing customer behaviour and increasing regulatory requirements, at a time when traditional competitors’ strategies converge and new entrants compete for customers,” Horta-Osório said.
The strategy will involve investing in digital capabilities to “provide enhanced services, deeper analytical capability and personalisation to benefit customers”, the bank said.
While 200 branches will be lost, Lloyds will create another 50 as part of plans to upgrade its branch network, adding greater automation and self-service capabilities, while remote advice services will also be extended.
The new strategy marks the end of the group-wide ‘Simplification’ programme to reduce operational complexity and improve customer facing systems which began in 2011 with the goal of rationalising its IT application estate, increase automation, and cut suppliers by more than 7,000 to less than 10,000.
“The next phase of our strategy builds on these strong foundations to meet the rapidly changing needs of our customers, and sets out how we plan to grow the business to become the best bank for customers and deliver superior and sustainable returns for our shareholders," the bank said.
Lloyds has already had some success in improving its customer facing digital services however, with 10.5 million active internet banking customers, while mobile banking users grew from 3.3 million in 2012 to over four million in 2013. According to the British Bankers’ Association, there is a total of £1 billion worth of ‘digital’ transactions each day in the UK.
The bank previously announced the appointment of former Royal Bank of Canada IT chief Morteza Mahjour to oversee the ongoing changes within the organisation and lead the revamp of IT systems, following the departure of former CIO Darryl West to rival Barclays.
Lloyds’ plans to cut staff echo similar moves made by other retail banks. Last November, Barclays has revealed it would cut 1,700 frontline jobs as it seeks to focus on delivering services through online and mobile channels.
“The way in which our customers access their banking services is changing rapidly. More and more people are choosing to use smart phones and technology for everyday transactions - using branches only when they need access to expertise,” a spokesperson for the bank said at the time.
“As a result of technological changes, we will be able to provide better service for our customers with fewer staff in our branches.”