Banking on the future

Lloyds has taken the plunge and sent the black horse racing towards a euro-based international online future.

Lloyds has taken the plunge and sent the black horse racing towards a euro-based international online future.

Banking is an unlikely sector to be seen to go against traditional thinking. Yet companies like Prudential and Halifax have chosen to forego their strong brand awareness to market online offerings under new identities.

This approach was also taken by Lloyds TSB when it was looking to create a presence in Europe with its new online banking service. The company chose to use the name The decision was based on a number of factors, says Bob Avery,'s IT director, although "it was far more of a marketing issue than anything else".

A key consideration was that the company already had an online banking arm using the Lloyds TSB name. However, Avery says this is merely an extension of its traditional banking service, offering customers another means of accessing their accounts, whereas "evolveBank is a different model - it's a direct channel bank". It has no branches, so operating costs are lower. The idea is that these cost savings can be passed on to customers in the form of better interest and improved services.

Avery says evolveBank has been pitched squarely at young, reasonably successful, Internet-savvy people who want direct banking services at a lower cost.

"The Lloyds TSB brand isn't well known in Europe anyway," he adds, although the company does have a presence on the continent. For example, in Spain, the country where it chose to launch first, Lloyds TSB has 28 branches.

Avery is also keen to point out that the new service is underpinned by the Lloyds TSB name - the company's distinctive black horse logo features on the evolveBank Web site.

The story began in mid 1999 when the company conducted a feasibility study. A number of systems integrators were approached before Lloyds TSB chose PricewaterhouseCoopers (PWC), which tendered a bid based on Sanchez banking software at the back end and customer relationship management (CRM) software from Broadvision at the front. "PWC's role was to make sure it all worked together," says Avery. "There were a lot of people involved."

As well as PWC, employees from Sanchez and Broadvision were involved and staff from Lloyds were on hand to oversee the project and deal with key standards issues such as security, capacity, back-up and recovery. Consultants from other companies, such as First Data Europe and Equifax, were also involved, along with Teletech, which helped to set up the customer contact centre based in Glasgow. "We're not a telephone bank but customers can call up and we do technical walk-throughs," Avery explains.

Spain was chosen as the first country in which to try the business, and the Web site went live last November. Before that the service was subjected to stringent testing, including a three-month period where it was road tested by the team's friends and family based in Spain.

Avery says there were lots of teething problems, but nothing really major. "It was our de-bugging phase," he says. "We didn't want to make the same mistakes as previous online banking offerings and we had to adhere to Lloyds TSB's standards." Since it went live, Avery claims the Web site has had 99% availability.

Two key areas in the testing were capacity and resilience. Other considerations included how to get documentation to the customers and how to tie in with the manual processes. Instead of receiving registration packs manually, customers print off registration forms locally before signing and returning them by post. This cuts down on the number of steps in the registration process. "The more steps you have, the more customers you lose," says Avery. "And our research showed that they wanted to do everything in one go." He says only 5% of its customers now request to receive registration forms by post.

EvolveBank reuses as much of Lloyds TSB's IT systems and software as possible and the Spanish operation is actually run from Lloyds TSB's computer centres in the UK. "If something is good why not use it?" he asks. "Why re-invent the wheel?"

This centralised model also tied in with the firm's plans to launch in other European countries. "It makes economic sense, gives more control and gives better speed to market," says Avery.

Essentially, all the company has to do to tailor its offering to additional countries is change the presentation and address various content management and regional issues. As it has been based on the euro as a currency since day one, the changeover to euros will not cause any significant problem either.

EvolveBank services are further tailored to individual customers using eCRM. "That's very much what Broadvision delivers to us," says Avery.

Using eCRM it can implement targeted marketing campaigns "within days or hours". It also helps to manage content on the Web site. Customers are greeted by name and targeted with offers or information they might be interested in. They can also access financial advice. Avery says the site resembles a financial portal.

As well as the regular credit account, savings account and credit card services, evolveBank customers can "sweep" money from one account to another. This automated service is based on rules set up by the customers themselves. "The functionality is quite rich compared to high-street banks," he claims.

A launch in Italy is planned for next year but the company will wait until the euro bottoms out and people have got used to using the new currency.

Lloyds TSB will also launch an offering in the UK in the first quarter of 2002 under yet another name, Goldfish Financial Services. This will be a joint venture with Centrica, which runs the Goldfish credit card. Lloyds TSB will have a 30% stake in the company. "The first three months of next year will certainly be interesting," says Avery.

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