a day ago
Lloyds IT outages caused by years of underinvestment, executive admits
A leading executive at Lloyds Banking Group has told staff that recent IT outages have been caused by at least a decade of underinvestment and likened Britain's biggest domestic lender to a neglected house.
In a leaked recording of a recent internal call with employees earlier this month, Ron van Kemenade, chief operating officer of the FTSE 100 bank, conceded that there had been 'more outages' and that 'all indicators point the wrong way'.
He told staff: 'We should acknowledge that over the past weeks and months, slowly but steadily, our service towards our customers has degraded.'
He said the problems were 'the result of probably ten to 15 years of underinvestment,' which he likened to a house falling into disrepair.
'If you don't maintain your home over the period of ten years, sooner or later, the doors are going to creak, the roof will be leaky, and the plumbing will start showing signs of deterioration.'
His candid comments lay bare the challenge facing Lloyds, which is led by Charlie Nunn and three years ago set out plans to invest about £4 billion by 2026 to revamp the business, including by overhauling its IT infrastructure and digitising services.
Lloyds is also following other banks by hiring technology workers in India, where it aims to have about 4,000 staff by the end of this year, while at the same time overhauling and cutting some IT roles in the UK.
A big three-day IT outage at Barclays earlier this year has led to heightened scrutiny of computer systems of banks. Problems at Lloyds have included service slowdowns that meant some customers had to try more than once to log in to their accounts.
Van Kemenade insisted on the call that the bank had examined the incidents and found 'no relationship whatsoever to the changes we've made to the organisation recently'.
A Lloyds spokesman said that van Kemenade's 'honest self-assessment reflects our determination to learn from when we don't get something right. While we are proud that our latest data shows services have been available 99.98 per cent of the time, we are investing billions every year in our technology and working hard every day to deliver more and better for customers.'
