Lloyds preps for PSD2 with £3bn digital investment
Lloyds has launched a new £3 billion investment in a three-year strategy to bolster its digital capabilities.
As reported earlier this month, digital can also take its toll as Lloyds revealed it was axing 930 jobs within its commercial banking, chief information office, community banking, insurance, and wealth and risk management. This is also on top of branch closures and other job cuts.
In its latest financial results, Lloyds enjoyed a 24% increase in pre-tax profits to £5.3 billion – the best in over a decade. While jobs and branches may be going, shareholders revelled in a 20% dividend rise and will get £3 billion.
As you may know, the UK banks that missed the open banking deadline are reaching the end of their extension period. The Nationwide Building Society, along with five banks – Bank of Ireland, Barclays, HSBC, RBS and Santander – have been given extra time. Nationwide says it has agreed a new timeline for implementation and will start the system in March.
As this and PSD2 levels the playing field between banks and digital players, banks are directing resources towards revamping their operations and services. And making job cuts along the way.
Lloyds is one of those looking to adapt and is aiming to slash costs to less than £8 billion by 2020. To give you a comparison, analysts at Autonomous Research estimate that Deutsche Bank spends about $4.1 billion a year on information technology, while for JP Morgan Chase it’s around $7.4 billion annually.
There have been other revamps prior to today’s (21 February) news. As reported last year, Lloyds is modernising its payments technology for corporate and institutional clients with SAP. The bank has signed for SAP’s cash management and payments platform.