RBS to slash number of tech and payments platforms supported from 130 to 20

RBS is planning to reduce the total number of technology platforms it currently uses by 50%, as it looks to turn around a business blighted by years of neglect and overly-complex management structures.

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RBS to slash number of tech and payments platforms supported from 130 to 20

Editorial

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The scale of the challenge facing new chief Ross McEwan as he commences a three-year £5 billion restructuring programme is starkly illustrated in the bank's annual results presentation, where it turned in its biggest loss in six years.

The bank's pre-tax loss for 2013 was £8.2bn, compared with £5.2bn in 2012. Describing the results as "sobering", McEwan laid down a blueprint to move from a bank with seven divisions and seven support departments to a bank with three customer businesses - personal, commercial, and corporate - supported by one shared support structure.

RBS has focused on technology as a key enabler in achieving its aims, setting out a strenuous rationalisation programme. This will see the bank slash the number of core banking systems it maintains from 50 to ten, and payments systems from 80 to 10.

The bank has already committed £700 million to rebuilding its retail operation over the next three years, with investment spending directed at customer-facing process improvements, instead of maintaining "inefficient legacy infrastructure".

A major branch refurbishment programme is already under way with over one quarter completed. 350 branches now have a digital banking zone where customers can use in-branch technology to access online banking. Wi-Fi in-branch allows customers to access their account via their own devices.

With 50% of the bank's customers now banking online and mobile and a concomitant 11% drop in branch transactions over the past year, McEwan has promised to further simplify its retail operations by, for example, making it possible for prospective customers to open a personal current account online and upload ID documentation over the Internet.

"We have made progress over the last year in improving the resilience of our systems and our investments over the next 12 months will maintain that focus," he says. "Once we have a resilient base, in the following two years we will seek to make progress in building an agile and flexible technology platform that makes banking easier for our customers."

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Comments: (1)

Bryan Foss

Bryan Foss Independent Director and Visiting Professor at Bristol Business School

Bank's systems portfolios have developed to be far too many, too complex and too separated to be affordable, manageable or reliable. There are often too many gaps between the business process and automation, also gaps between the systems themselves. This makes processes costly, innefficient and slow - simply 'broken'. Staff numbers can often be reduced as process and systems efficiency improves - just look at what has been achieved by the car industry using techniques that are transferable here.... But where was that incentive for banking before? 

 

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