UniCredit 2016-2019 strategic plan: to cut 14000 jobs and invest 1,6 billion euro in digitisation

Italian giant UniCredit has become the latest bank to outline plans to cut thousands of jobs and invest billions of euros in digitisation in a bid to boost profits.

Under a sweeping three-year plan, the bank will eliminate 6500 jobs on top of previously announced cuts, bringing the total number of losses to 14000 by 2019, resulting in savings of EUR1.1 billion.Meanwhile, hundreds of branches are being closed and EUR1.6 billion is being pumped into IT investments, including „digitalisation activities” and core system updates designed to smooth the transition to online and mobile-centric services.

These moves are designed to generate EUR 1.7 billion net annual recurring cost savings from 2019, helping the lender make a EUR4.7 billion net profit despite weak revenue growth.

Bank say that the transformation of the operating model aims to increase customer focus whilst simplifying and improving the efficiency of the Group, to achieve a lower sustainable cost base using digitalization as an enabler to support the transformation.

The main initiatives include:

. Redesigning end-to-end processes and lowering the „run the bank” costs by leveraging on the global operations footprint and the development of economies of scale;

. Increasing client focus through strong attention to the customer experience, product standardization and the increase of client facing activities;

. 1.6 billion euro IT investments to support the business transformation and strengthen IT infrastructure through digitalization activities, technological development of core systems and the continuous updating of the infrastructure, while ensuring compliance with regulatory requirements.

Jean Pierre Mustier, Chief Executive Officer, UniCredit S.p.A. said: „We have developed a pragmatic plan based on conservative assumptions, with tangible and achievable targets, dependent on cost and risk management, levers which are firmly under our own control.”