Alliance & Leicester takeover bid targets £65m in IT savings

Spanish bank Santander expects to generate technology savings under proposed merger

Prospective A&L owner is likely to push IT standardisation

Spanish bank Santander is aiming for £65m in savings via IT standardisation should its £1.26bn bid for Alliance & Leicester (A&L) go ahead.

Santander is understood to be preparing an integration strategy similar to that undertaken at Abbey, the UK bank it acquired in 2004.

Abbey runs Santander’s in-house, Microsoft-based banking platform Partenon and A&L is expected to standardise under the same IT plan for its back-office operations should the acquisition complete.

Santander said in a presentation to analysts that it intends to save £65m from IT initiatives as well as £30m from “efficiency best practices”, £25m from operational improvements and £35m from central office and support service rationalisation.

A&L had already embarked on a major IT-driven change project. Earlier this month, before the takeover news was announced, A&L appointed former group IT director Ian Buchanan to its board as part of a reorganisation of senior roles linked its business transformation programme.

Speaking to Computing last week, Buchanan said that the programme would help A&L to “look at the way the business is organised and potentially take advantage of having a single platform across all businesses and reduce costs".

A&L is part-way through its IT-driven transformation, which includes moving core retail and commercial banking systems to Accenture's Alnova technology platform, and last year's outsourcing of its voice and data network to BT.

“The [pre-existing business transformation] restructuring is a natural consequence of our overall strategy and we are looking at simplifying some of our processes and technology,” said Buchanan.