Lloyds Banking Group today launched a new £3bn investment in a three-year strategy to bolster its digital capabilities. The bank is driving capital towards technology and its staff to compete against an increasingly competitive backdrop of other traditional banks, challenger banks and fintechs.[1]
The UK Banks that missed last month’s Open Banking deadline are reaching the end of their extension period. As PSD2 levels the playing field between banks and digital players, banks are directing resources towards digitally transforming their operations and services.

Lloyds is the latest in the string of traditional banks to ramp up their digital capabilities aiming to slash costs to less than £8bn by 2020 and transform the banking experience for their end-customers.[2] Analysts at Autonomous Research LLP estimate that Deutsche Bank AG spends about $4.1 billion a year on information technology and Wall Street giant JPMorgan Chase & Co. around $7.4 billion annually.[3]
Farida Gibbs, CEO and founder of Gibbs Hybrid, comments, “In order to digitally transform, banks need to create a culture of innovation which goes beyond investment in the latest technology. Lloyds has announced it is bumping up employee training time by 50 per cent.[4] Talent and human capital provide the best value and return on investment for banks looking to diversify their digital offerings. Investment in talent and digital skills goes hand in hand with investment in technology solutions to help banks become more fluid and responsive to changing customer expectations.”

“Digital technologies have redefined the banking experience. In a world where everything is accessible at the click of a button, customer expectations need to be matched by the experiences created by banks.  Bank branches are expensive with most big retail bank branches costing banks 40-60 per cent of their total operating costs.^[5] These cost savings can be redirected towards investments into creating digital banking experiences that accommodate evolving customer habits.

Farida continues, “Technology is beginning to encompass all aspects of bank operations. So, working with a single-source supplier which integrates digital into the DNA of the bank – from the talent to the technology solutions – is key to adopting a digital mind-set which will support the digital transformation journey of a bank end-to-end.”