Abbey hopes EDS venture will cut £90m off IT spend

Abbey National and EDS, the US-based IT services giant, have put the finishing touches to a joint venture that the bank hopes...

Abbey National and EDS, the US-based IT services giant, have put the finishing touches to a joint venture that the bank hopes will save £90m in IT spending over 10 years.

Abbey will now move 1,700 staff to the joint venture after deciding to outsource its banking processes earlier this year.

The bank has also announced that EDS will receive more than $390m, (£260m), over 10 years to provide business process management.

EDS will add the development of new processing and IT platforms to Abbey National's existing skills in mortgages and loans, in addition to managing ongoing operations.

While Abbey National will continue to attract customers and assess and make loans, EDS will handle the billing, taking of bill payments and routine call centre enquiries.

Although share allocations have remained secret, Abbey National has said that both companies will enjoy a 50-50 economic interest in the deal.

One important element for the British bank is the hope that the system will prove to be so successful that other European banks will call on its services in the future, outsourcing some of their IT needs.

Abbey hopes that the 10-year deal will save it £90m, but says that the joint venture does not have a name because it will be working behind the scenes and if it is successful customers should not notice any change.

"If we are doing the job right Abbey National customers will not notice that anything has changed," said Stephen Holder, director of communications, at EDS.

He added that over the longer term, "the very sophisticated database management system provided by EDS will enable Abbey National to improve its quality of service by targeting customers with far greater accuracy in its sale of financial products".


Kate Rew

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