Lloyds signs £1.3bn 7-year deal with IBM and transfers 1,900 staff
Lloyds Banking has reportedly signed a deal worth £1.3bn ($1.6bn) over seven years to outsource its computer systems to IBM. The move will see 1,900 jobs shift from the bank to IBM, mostly impacting the banking group’s data centres. Whilst it is no longer recognised by the bank, Lloyds Trade Union claims that internal criticism of the project is growing among senior managements due to concerns over security and data integrity associated with offshoring critical systems that underpin the bank's key functions.
Lloyds Banking Group is planning to outsource large parts of its IT estate and transfer 1900 staff to IBM in a deal worth £1.3 billion over seven years.

The agreement will see 2000 of the bank's 3200 applications running across Windows, Unix, Linux and IBM I-Series platform outsourced to Big Blue.



The project, dubbed Aurora, was due to be announced in January, but negotiations with IBM are taking longer than anticipated. It will see 1961 staff transferred to IBM, with the impact being felt mostly at the bank's date centres in Copley, West Yorkshire and Edinburgh.



Lloyds Trade Union, citing a presentation by the bank's chief information officer Morteza Mahjour, says that after four years, only 193 of the staff transferred to IBM will be working on the bank's infrastructure, with the rest of the roles offshored.



The deal, which is expected to be concluded in the coming months, will see the bank reap £760 million in cost savings.



However, the Union claims the hold up in clinching the agreement is due to mounting internal criticism of the project from "senior managers and head of functions in IT concerned that critical systems which underpin the bank's major payment, treasury, trading, settlement and digital services are being outsourced to a third party to eventually be run offshore".



it continues: "Even the Bank admits that the migration of the accounting details of 20 million customers onto a private cloud to be run by staff based offshore could 'weaken existing security controls and adversely effect the confidentiality and integrity of Bank data'."



The internal Lloyds Trade Union is no longer recognised by the bank, which is understood to have agreed terms of the deal with officially sanctioned union bodies Unite and Accord.