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Lloyds Bank in talks to outsource data centres to IBM

Mon 16 Jan 2017

Lloyds Bank is currently in talks to outsource data center management to IBM. Under the proposed plan, IBM would acquire data centers from Lloyds and charge the bank for management and services.

Discussions may have been started, in part, to address technical outages which have caused numerous problems for customers attempting to access their accounts.

While there is no time line for finalizing the outsourcing deal, anonymous sources quoted by the Register said that the talks started some months ago and are currently under way.

A person close to the matter said, “IBM is having conversations with Lloyds about a massive buyback of their estate. Lloyds will reverse management and the estate and maybe get some cash in the process.”

Customers of the bank have been reporting frequent service outages as far back as July 2016, with users unable to access their accounts via mobile and banking apps. Most recently, an unspecified glitch left customers without access for several hours, and with intermittent access over the course of last week.

Lloyds currently holds a rating of 2/5 stars at downdetector.uk, and 1.9/5 points at isitdownrightnow.com. Downdetector cites internet banking services as the source of the majority of issues reported, at 80%. Mobile banking issues comprise 13%, with the Lloyds website complaints make up the rest.

The bank currently has data centers in Copely, Pudsey, Peterborough and Corby. Some current employees of Lloyds data centers may have the option of moving to IBM when the transfer occurs, sources say.

The company has made drastic changes over the past two years, with layoffs totaling 12,000 from 2015-2017 and over 200 branch closures. 3,000 jobs were cut last summer, shortly after the Brexit vote, and another 1,300 in October. 640 of the jobs lost last year were IT personnel.

Sources close to the story said that the data center deal was more about cutting costs than supporting customers.

“It looks good on the balance sheet for the City,” one person said, while another added, “It is all about cost cutting and the bottom line, not service.”

Lloyds has a history with IBM, having used them for networked voice and data services until 2010, when that work was given over to British Telecom.

Tags:

banks business data data centre IBM news UK
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