Lloyds Bank to spend £3 billion on digital transformation just weeks after admitting IT department staff cuts

Lloyds claims it will become a 'more digitised' banking provider, despite cutting IT staff

Banking giant Lloyds has confirmed plans to invest £3 billion into an ambitious, new IT transformation plan - just weeks after it also revealed that it had cut staff in its IT department.

The company revealed the plans on Wednesday to spend billions of pounds on improving its technology infrastructure and services over the next three years.

It said it wants to become a "digitised, simple, low risk, customer focused, UK financial services provider" by implementing new digital technologies.

The investment plans were unveiled just over two weeks after Lloyds admitted plans to cut a total of 250 IT jobs, as part of cuts that would also affect its commercial banking, community banking, risk, insurance and wealth departments.

"Where it is necessary for employees to leave the company, we will look to achieve this by offering voluntary redundancy. Compulsory redundancies will always be a last resort," said a spokesperson.

However, the bank has made it clear that it still intends to increase its technology investments, despite these cuts. It says that it plans to use IT systems to improve operational efficiencies and simplify data-driven tasks.

The company's £3 billion pledge on IT is a 40 per cent increase compared to previous plans. Lloyds said it wants to capitalise on mobile and online channels, in particular.

Under this new plan, the bank hopes to cut operational spending to around £8 billion by 2020. Group chief executive António Horta-Osório, group chief executive, said that the shift in spending priorities was made in order to address new competitive challenges.

"As we look to the future, we see the external environment evolving rapidly. Changing customer behaviours, the pace of technological evolution and changes in regulation all present opportunities," he said.

"Given our strong capabilities and the significant progress made in recent years we believe we are in a unique position to compete and win in this environment by developing additional competitive advantages."

But he did not discuss the job losses. Horta-Osorio added: "We will continue to transform ourselves to succeed in this digital world and the next phase of our strategy will ensure we have the capabilities to deliver future success."