Halifax and Bank of Scotland merger set to safeguard IT jobs

Complementary IT systems at the Bank of Scotland and Halifax should safeguard IT staff jobs if the merger proposal goes through,...

Complementary IT systems at the Bank of Scotland and Halifax should safeguard IT staff jobs if the merger proposal goes through, industry experts claimed this week.

The cost and complexity of integrating systems are now important factors in merger talks. The dominant company in financial services mergers often looks to cut costs by scrapping duplicated IT systems, sacking IT staff or cancelling outsourcing deals.

Earlier this year Computer Weekly revealed that insurance giant CGNU had scrapped a £124m outsourcing contract with IBM after only two years as part of a post-merger consolidation of its IT systems.

However the outsourcing arrangements of Halifax and Bank of Scotland should not pose any major headaches if the merger goes ahead, according to outsourcing experts.

While Bank of Scotland has a string of outsourcing deals - including a £700m 10-year deal with IBM - Halifax has only contracted out a small amount of its IT services, said Robert Morgan, chief executive of outsourcing consultancy Morgan Chambers.

"There is relatively little overlap between the IT systems so it is an almost perfect merger," Morgan said. "There will be some consolidation but it is likely to be minimal."

The complementary IT systems would also keep IT job losses to a minimum, Morgan added.

Three years to get merged IT right

The time it takes to merge IT systems and create a common platform could be up to five years in the case of Lloyds TSB. But a goal of three years is now standard.
  • Year one: agree integration strategy to bring separate systems together
  • Year two: transfer the mass of customers data between banks
  • Year three: join the actual IT systems


Nick Huber
nick.huber@rbi.co.uk

Read more on IT outsourcing

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