Lloyds Banking Group is reinvesting savings being made through a major restructuring programme into improved processes and digital customer interaction channels.
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In 2011 the state-owned bank launched its Simplification Programme under the guidance of Mark Fisher, who took over as director of group IT and operations in 2008, to manage the integration of HBOS. He previously oversaw the integration of ABM Amro into the Royal Bank of Scotland (RBS).
When launched, the Simplification programme – which rationalises processes, reduces layers, suppliers and properties – expected to make £1.5bn savings in 2014. At the time, there were lots of areas where overlap could be reduced because Lloyds had just taken over HBOS, which itself was a combination of Halifax and the Bank of Scotland.
Back in 2008, following the HBOS takeover, the Lloyds Banking Group said: "Following a detailed review, Lloyds TSB believes that through the implementation of cost synergies and other operational efficiencies it will deliver total pre-tax annual cost savings greater than £1.5bn."
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The bank said in its results that this has been achieved. “The ongoing programme realised approximately 600m in further cost savings in 2013, generating a total of around £1.5 billion annual run-rate savings since inception and having identified further opportunities we are now increasing our target run-rate savings by a further £100 million to £2 billion by the end of 2014.”
The total spent on the programme to the end of 2013 was £1.7 billion.
Going forward the bank said it will send more on digital capabilities across our brands and divisions. “We are reinvesting a significant proportion of the savings realised from Simplification to further improve processes and the quality of customer interaction through branches, via the telephone and digital channels,” said the bank. “Brand revitalisation is being reinforced by an extensive programme of branch refurbishment and investment in telephony and digital channels.”
Lloyds reported that there are no more than 10.5 million active internet banking users and more than four million mobile banking users, with over 1.2 billion logins in 2013.
The bank spent £1.172bn on IT in 2013 compared to £1.171bn in 2012.