Lloyds Banking Group Drives Innovation through Outsourcing

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LBG (Lloyds Banking Group), a major financial institution in the UK is taking outsourcing as its first step in driving innovation and increasing customer handling efficiency. This latest strategy is also expected to manage takeover threats from competitors. Although the initiative is aimed at business growth, just like most major organisational changes, it seems inevitably vilified by some of the key influencers in the country’s job industry.

 

Lloyds moves 1,000 staff to an outsourcing company to

 

Despite being founded by the second oldest bank in the UK, Lloyds has not been able to escape the reality in the industry’s competitive space. LBG has been subjected to reports going since July about a takeover prospect by an LBG competitor, Aberdeen Asset Management. Assumptions on a buyout started spreading after the £3.8 billion merger between Standard Life and Aberdeen was finalized in August. In relation to a buyout threat, there are speculations that Lloyd’s recent move to improve its business operations through outsourcing could be the banking group’s way to avoid a possible takeover.

 

Although the bank’s overall intention is good, Unite national officer, Rob MacGregor labels the job transfer to an outsourcing company as a ‘betrayal’ stating that:

 

“The bank’s ‘sale’ of its committed Scottish Widows and Clerical Medical staff represents contempt for long-serving and skilled employees.”

“The decision to simply sell off the workforce will come as a shock to staff at the bank. Unite is calling on Lloyds to reconsider this shameful deal and do the right thing by its staff who have worked hard to ensure the business is the success it is today.

 

Under the new outsourcing contract, around 1,000 Scottish Widows jobs will be outsourced to Diligenta – a subsidiary of an outsourcing company based in India, TATA.  Although the job transfer is said to be “a shock to the staff at the bank,” the transfer is said to be facilitated by a so-called TUPE agreement (Protection of Employees on Transfer of Undertakings). This agreement will supposedly secure the rights of Lloyds employees during the transfer. The bank’s spokeswoman stated the following:

 

“Contractual terms (Including salary) are protected through the TUPE process.

“Staff will be able discuss the non-contractual arrangements with Diligenta over coming months.”

 

The job transfer will mainly focus on service operations for customers with heritage life pensions and investment products where some of which are under LBG’s clerical medical division. Its main objective is to place the operations and products to a digital platform. Using outsourcing as its latest business strategy, Lloyds Banking Group is anticipating a more efficient process in managing the bank’s products and customer needs.