Standard Chartered focuses IT on retail and risk as Winter’s axe falls
Standard Chartered is to invest $3 billion in “strategic opportunities” and its technology infrastructure as part of a wholesale reorganisation of the bank in the wake of a $139 million third-quarter loss.
The restructuring will see 15,000 jobs – 17% of its workforce – go over the next three years, while it identifies $100 billion of assets which will be restructured or exited and it undertakes a £3.3 billion ($5.1bn) rights issue to strengthen its capital ratio, reinforce the balance sheet, and fund the execution of the new strategy.
“This comprehensive programme of actions will result in a lean, focused and well capitalised international bank, poised for growth across our dynamic and growing markets in Asia, Africa and the Middle East,” said Bill Winters, group chief executive. “We have an outstanding franchise at the heart of this bank, and we are focused on taking advantage of it.”
The bank gave few details of where the new investments will be made, but said it is adopting a new risk tolerance framework and will invest significantly in compliance and related infrastructure “as we continue to focus on our behaviour, systems and processes”.
Its regulatory and compliance spend has tripled over the last three years to $1 billion a year. “We will continue to invest in making a meaningful and leading contribution to the global fight against financial crime, and to do so by engaging proactively and transparently with regulators and other stakeholders,” the bank said.
Other technology spending is earmarked for an accelerated transformation of its retail banking operations where it plans to invest in “technology to save costs and improve the customers’ experience”. Improvements to retail client systems and digital capability are intended to result in 30% of sales and 40% of payments moving online by 2018.
Similar emphasis on internal processes and controls was placed by Deutsche Bank as it announced a similar root-and-branch restructuring last week, with a major IT overhaul a major part of its new strategy.
