Lloyds slashes more jobs and people as fintech is deployed battle of the cost bases
Another 49 branches and 305 jobs have gone as Lloyds bank replaces people and premises with digital services as part of the current battle of the cost basses being fought in the retail banking sector.
The cuts include people serving customers in branches as well as those working in the 49 branches closed.
Lloyds said that the increased use of digital banking channels mean the bank simple doesn’t need as many people or branches.
“Customers are increasingly choosing to use digital and mobile channels for their everyday banking needs,” said the bank in a statement. “As a consequence, the number of customers visiting some of our branches has declined in recent years. In response to this, we have confirmed the locations of some branches which will close next year across Lloyds Bank, Halifax and Bank of Scotland.”
Fintech challengers to banks are offering banking services to customers at a lower cost. This is because they use the latest digital technology and not only avoid the high costs and complexity of legacy systems but also operate with hundreds of staff rather than tens of thousands.
Leading fintech industry figure Anne Boden told the audience at the recent Innovate Finance fintech event that the big battle in banking involves the cost base rather than innovation. All traditional banks can innovate. They have huge budgets so there is nothing stopping them creating the same fintech services as challengers. They are already doing it. But rather than having hundreds of staff they have tens of thousands. As a result the new players have a huge advantage in terms of cost base.
Lloyds is not alone amongst traditional banks in closing branches and eliminating customer facing roles. Figures from the European Banking Federation (EBF), which include the UK, revealed more than 9,000 bank branches were closed across Europe in 2016, and more than 50,000 people working at those banks lost their jobs.
Barclays and Santander have announced branch closures on my local high street in South East London.