Lloyds Banking Group is going to reduce the number of data centres from 16 to 12 sites over the next two years as more of its processes, transactions and applications are moved on to the public cloud. We think the number will be reduced by a further 50% by 2026. 56 million customer records and transaction data had been successfully migrated to the Google Cloud Platform (GCP) at the end of 2022. The only information that hasn’t yet been migrated to the GCP is that classed as highly confidential data such as commercially sensitive business plans and sensitive personal data.
That will change later this year.
Interestingly, the newly appointed Chief Operating Officer, Ron van Kemenade, who was previously the Chief Technology Officer for ING Bank, was a great believer in aggressively shifting to the private cloud rather than the public cloud. Simply, a private cloud is a service that is completely controlled by a single organisation, like Lloyds, and not shared with others. In contrast, a public cloud is a subscription service that is offered to any and all customers who want similar services. At ING’s investor day last year, Mr. Kemenade said the bank had: “saved upwards of £100 million in operational expenses in recent years by consolidating on the private cloud”. He said that: “34% of all applications worldwide at ING now run on private cloud and he hoped to get that figure to 70% by 2025. The ING private cloud was more economical than public cloud”.
It will be interesting to see whether he changes his mind on the public v private cloud debate when he joins the bank later this year, or whether Lloyds changes its position. Lloyds says it wants to have 55% of its applications on the cloud by 2026.
Time, will tell.
An internal presentation seen by the union and signed off by the GEC, says Lloyds is looking at a £572 million revenue uplift and cost savings by 2026 through its focus on data and analytics. Much of those savings will come from further rounds of redundancies between 2024 and 2026.
The presentation also says that:
Lloyds is looking to reduce what the bank calls: “its total run and change technology costs” by 15% from 2026. That’s from a baseline figure of £3.92 billion.
The number of testers as a proportion of the engineering population will be reduced from 21% in 2022 to 7% by 2026. Based on the figures in the presentation, that will see the tester population fall from 1,512 to 504 over the next 3 years.
All of the figures in the presentation, including the number of customers who are going to receive hyper-personalised communications by 2026, the number of engineers who are going to be licensed to operate cloud technology, the critical or high risk vulnerabilities that are outstanding after 90 days being significantly reduced and the number of staff who can self-serve data and analytics are all very interesting and whether the bank achieves its targets will depend on a range of factors that fall outside the scope of this Newsletter. However, what Lloyds needs to say now is how many more IT jobs, and jobs generally, are going to be lost over the next 3 years and what is it going to do to mitigate those losses? So, how many testers for example, are going to be offered training and development opportunities to enable them to move into data analytics, engineering or coding roles. Lloyds needs to come clean about its plans rather subjecting staff to this endless game of wait and see.
Members with any questions can contact the Union’s Bedford Office on 01234 262868 (Choose Option 1).
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