Our Strategy

Transforming the Group for success in a digital world

In February 2018, we launched our new three year strategy and are investing more than £3 billion

We identified four strategic priorities focused on the financial needs and behaviours of the customer of the future:

Our Strategy
Leading customer experience

Leading customer experience

In order to be the best bank for customers, we recognise that we must continue to adapt to changes in customer behaviour, technology-driven competition and regulation. Our propositions must be reflective of heightened customer expectations for ease of access,  personalisation and relevance, as well as the needs created by changing life patterns.

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  • Remain number 1 UK digital bank with Open Banking functionality
  • Unrivalled reach with UK's largest branch network, serving complex needs
  • Data-driven and personalised customer propositions

Progress in 2019
In 2019, we have built on the strong progress delivered in 2018, with further improvements in our customer propositions supporting the continued growth of our franchise and improved measures of customer satisfaction.

Building a market leading digital experience
We are the largest digital bank in the UK, with 16.4 million digitally active and 10.7 million mobile app customers. During the year, we have seen increased customer engagement with the enhanced digital features introduced in 2018 and have launched a range of new features that enable our customers to be more in control of their finances. These include the ability to change address via the mobile app and app statement searches, the latter of which is being used c.1.2 million times per month on average and is helping us to reduce our use of paper.

Consistent with this focus, we have also built on our progress in allowing our customers to see all their bank accounts, across different providers, in one place. In 2019, we were the first UK bank to expand this Open Banking aggregation capability to include both savings accounts and credit cards. We’re unique amongst our banking peers in enabling our customers to also view these products together with their Group insurance and pensions products, with our Single Customer View demonstrating strong engagement levels.

#1 branch network, serving complex needs
As a core element of our multi-channel model, we remain committed to maintaining the largest branch network in the UK and our market share of around 21 per cent by 2020. In the year we have continued to make number of changes to ensure that our network reflects our customers’ evolving needs. As part of this, we have expanded the reach of our remote advice service to around 580 branches, which alongside the ability to access the service from the comfort of their own homes, is providing our customers with increased choice and convenience in how they can discuss their financial needs with us. In addition, our branch colleagues have also been able to increase their focus on addressing customers more complex financial needs, with this now accounting for around 50 per cent of their time.

Personalising our customer propositions
We recognise that our diverse customer base want and expect different things and have continued to develop products and services that are more personalised to their specific needs. Among these, we have launched a range of smart tools that our customers can access digitally, including upcoming payment alerts and a ‘Save the Change’ feature, through which they can aim to achieve a range of financial goals through small behavioural changes.

Focus for 2020
In 2020, we will continue to focus on improving our customers’ digital banking experience, with new features providing them with greater insights into their transactional activity and ability to achieve their financial goals. We will also continue to deepen our customer insights to develop more personalised products and services, while also ensuring our branch network remains relevant to our customers’ needs.

Digitising the Group

Digitising the group

Our market leading cost position and customer franchise are sources of competitive advantage. However, we must not be complacent and must further digitise the Group to drive additional operational efficiencies, improve the experience of our customers and colleagues and allow us to invest more for the future. In addition, we must continue to simplify and progressively transform our IT architecture in order to use data more efficiently, enhance our multi‑channel customer engagement and create a scalable and resilient infrastructure.

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  • Deeper end-to-end transformation targeting 70 per cent of our cost base
  • Simplification and progressive modernisation of our data and IT infrastructure
  • Technology enabled productivity improvements across the business

Progress in 2019
We have continued to progress our technology enabled transformation during the course of the year, delivering better products and services that customers value and reducing time to market. We are also driving additional operational efficiencies across the organisation as we progressively modernise our IT and data architecture and improve processes. This has been underpinned by a continued commitment to invest significantly in technology.

Top quartile technology spend
Consistent with the scale of our transformation, we continue to invest significantly in technology. In 2019, our technology spend, which increased by 14 per cent year on year, equated to 19 per cent of operating costs and remains among the top quartile of global peers. Importantly this was achieved while reducing operating costs, with our modular approach to transformation and IT modernisation delivering business efficiencies and creating capacity for greater levels of investment. The mix of our technology spend also continues to evolve, with greater emphasis on the development of new capabilities, with the combination of this and enhancing existing capabilities accounting for over 75 per cent of spend in 2019.

Embracing the power of technology
As our transformation progresses, we have significantly increased our adoption of new technologies and are seeing a number of tangible customer and colleague benefits as a result. For example, having introduced the use of robotics for simple, repetitive tasks in 2018, we have now created in excess of 1 million cumulative hours of colleague capacity, allowing them to focus on more value adding activities for our customers. In addition, around 55 per cent of our cost base has now been covered by transformation. This is up from just from 12 per cent at the end of 2017 and we expect this to surpass 70 per cent by the end of 2020.

The scaling of our use of machine learning is also delivering improved customer outcomes. For example, virtual assistants managed up to 5,000 customer conversations daily in 2019, with customer satisfaction increasing by more than 10 points. In addition, around 25 per cent of queries are handled without being passed to a colleague, a trend that is expected to increase further.

The Group has also significantly increased its adoption of private cloud, with more than 650 applications now migrated. These investments deliver a more efficient, scalable and flexible infrastructure and underpin the continuous improvement of our products and services for our customers’ benefit.

The largest digital bank in the UK
With 16.4 million digitally active users and 10.7 mobile app users, we are the largest digital bank in the UK, with 75 per cent of products now originated digitally. In line with this continued shift to digital channels, we are continuing to roll out new features for our customers, resulting in increased engagement as adoption increases.

Focus for 2020
Our technology investment will continue to focus on areas that deliver meaningful benefits for our customers and colleagues. We will further embrace new technologies and increase data capabilities to develop insight-driven propositions, while ensuring that these reflect customer expectations. This will be delivered alongside a rigorous focus on ensuring the safety and security of our customers’ data.

Maximising the Group's capabilities

Maximising the Group's capabilities

To better address our customers’ banking and insurance needs as an integrated financial services provider and improve their overall experience, we will make better use of our competitive strengths and unique business model.

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  • +£50 billion growth in financial planning and retirement open book assets under administration
  • >1 million new pensions customers
  • +£6 billion of additional net lending to start-ups, SMEs and Mid Market customers

Progress in 2019
In 2019 we have continued to enhance and leverage the Group’s capabilities and unique business model to meet our customers’ banking and insurance needs more effectively.

Meeting our customers’ growing financial planning and retirement needs
As the UK’s sole integrated financial services provider, we are unique in being able to show and serve all of our customers’ financial needs in one place. In 2019, we extended our Single Customer View capability to over 5 million customers, who are now able to view their insurance and pension products alongside the banking products they hold with us and other providers. Importantly, this is enabling our customers to engage with their longer term savings needs more proactively, with engagement levels surpassing those of stand alone insurers.

Building on our progress in 2018, we have also rolled out a number of improvements to our long-term savings and pensions customer propositions, with our workplace pensions offering also benefiting from the close coordination of our Commercial Banking and Insurance & Wealth businesses. Taken together with further transfers from the acquired Zurich book, we have successfully grown our open book retirement and investment assets under administration by around £30 billion in the year, or £37 billion since 2017.

Leveraging our partnership with Schroders to accelerate our Wealth strategy
In 2019 we formally launched Schroders Personal Wealth, a market-leading wealth proposition, which combines the investment capabilities and innovative product offering of Schroders with our distribution footprint and digital reach. This allows us to better serve our customers’ financial planning and retirement needs, and underpins this joint-venture’s target of becoming a top three UK financial planning business by the end of 2023. In addition, as part of our broader strategic partnership, we are developing a full service offering for our customers, including access to a leading wealth and investment management business and a mass market direct offering that is due to launch in 2020.

Improving the experience of our Commercial Banking clients
We have delivered material improvements to our client experience, while also meeting our £18 billion gross lending commitment to UK businesses, remaining a leader in green financing and maintaining our strong support for exporters and manufactures. We have significantly reduced the time taken to fulfil various client needs through the digitisation of key banking processes. In business banking, the average time to cash for new unsecured loans has been reduced from 6 days in 2018 to a few hours. Similarly, the launch of API connectivity has resulted in a response time of 1.5 seconds for payables transactions, while also driving significantly quicker and more accurate asset finance credit decisions. Through the enhancement of our cash management and payments capabilities, we have also successfully deepened our client relationships.

Focus for 2020
In 2020, we will extend the reach and functionality of Single Customer View to around 9 million customers, introducing new features that will enable customers to engage with their long-term savings and investments more proactively. In addition, we will continue to support the development of Schroders Personal Wealth in line with its ambitious targets, while also making further improvements to our business clients’ digital banking experience.

Transforming ways of working

Transforming ways of working

Our colleagues are crucial to the success of our business. In order to deliver our transformation during the current strategic plan and beyond, our colleagues will require new skills and capabilities to reflect the changing needs of the business as it adapts to the evolving operating environment. At the same time, colleague expectations of their employers are changing. As a result, we are making our biggest ever investment in colleagues to ensure that we continue to attract, develop and retain these skills and capabilities, while fostering a culture that supports a way of working that is agile, trustbased and reinforces the Group’s values.


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  • 50 per cent increase in training and development to 4.4 million hours per year
  • Up to 30 per cent change efficiency improvement

Progress in 2019
With our competitive environment increasingly influenced by technological change and innovation, it is critical that we continue to equip our colleagues with the skills needed to deliver our ongoing transformation. We have made significant progress in 2019 and are seeing tangible benefits as these changes take effect. These achievements also continue to be supported by improvements to our working environment, with benefits including greater collaboration and efficiency.

Building skills for the future
To deliver our significant transformation, we are continuing to make our biggest ever investment in our people during the course of the current strategic plan. In 2019, we delivered 5.5 million of total training hours, an increase of 28 per cent compared to 2018. We have also now delivered more than 3.2 million of cumulative training hours to develop the skills for the future since the end of 2017, and are well positioned to deliver our target of 4.4 million cumulative training hours by the end of 2020.

In addition to up-skilling our colleagues, we are also using targeted recruitment to introduce new skills into the organisation across areas that will support the new strategic competencies of the Group going forward. We have also hired over 1,200 colleagues across critical areas such as engineering, data science and cyber security. The integration of skills such as these into our colleague base positions us well to continue transforming the Group for success in a digital world, with other benefits including a reduced reliance on third party providers.

Changing the way we work
Consistent with our aim to embrace new ways of working, we have continued to make things easier than ever before for our colleagues to work in a more collaborative manner. 96 per cent of our colleagues are now based in one of our six strategic hub locations. We continue to invest in improving the working environment with 34,000 colleagues benefiting from refreshed workplaces in 2019. Our ongoing changes to working environments are helping create a hub of agile working, focusing on collaborative activity-based spaces which foster innovation and make it easier for our colleagues to focus on delivering better experiences for our customers. Moreover, by creating an environment where colleagues can collaborate more easily regardless of location, this will help us as an organisation significantly reduce our carbon footprint. The combination of these factors is resulting in a cultural shift across the Group, with over 33 per cent of change now delivered using Agile methodologies and we continue to expect this number to surpass 50 per cent by the end of 2020

Focus for 2020
We will continue to provide our colleagues with the required skills to support our ongoing transformation, with more specialist skills gaps being addressed by targeted recruitment. This, combined with our shift towards a more collaborative culture will enable us to reduce bureaucracy, harness innovation and deliver change more efficiently than ever before, while also making the Group a more attractive place for people to work.