Lloyds in £1.3bn tech outsourcing deal with IBM
Lloyds tech gallops offshore
UK-based banking group Lloyds is to outsource its tech to IBM in a seven-year deal worth £1.3 billion, according to FT. More than 1,900 jobs will be shifted to IBM and £760 million of costs will be cut as a result.
The majority of the staff will be transferred from the bank’s UK data centres in Copley, West Yorkshire, and Edinburgh.
According to FT, “Lloyds Trade Union (LTU), which is no longer recognised by the bank, said it its newsletter to its 35,000 members that staff transferred to IBM would be kept on for a year but most would be laid off within four years and replaced by cheaper, offshore workers”.
LTU claims less than 200 of the staff would continue working on the Lloyds contract after four years. The majority of the work would be then done by around 1,000 people based offshore.
Also, LTU raised concerns about Lloyds’ “critical” technology that supports the bank’s payment, treasury trading, settlement and digital operations being run offshore by a third party. LTU cited senior managers and head of IT functions, who flagged these issues.
“Even the bank admits that the migration of the accounting details of 20 million customers on to a private cloud [IBM Cloud] to be run by staff based offshore could ‘weaken existing security controls and adversely effect the confidentiality and integrity of bank data’,” FT quotes the newsletter.
Earlier this year, Lloyds suffered a distributed denial of service (DDoS) attack, carried out by an international criminal gang.
The bank responded saying it is “considering options to extend use of cloud technology”, but declined to provide any further details.
